Free

Profit Margin Calculator

Profit margin is profit divided by selling price: (Price − Cost) ÷ Price × 100. Markup is profit divided by cost: (Price − Cost) ÷ Cost × 100. For example, if you buy an item for 80 and sell it for 100, the profit is 20, the margin is 20% and the markup is 25%. With this tool you can calculate profit and margin, find the selling price for a target margin and handle discount calculations.

Profit and margin

Profit
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Profit margin
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Markup
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Selling price for a target margin

Required selling price
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Profit
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Markup
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Discount calculator

Discounted price
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Discount amount
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Original price from a discounted price

Original price
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Discount amount
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How to use it

  1. 1In the first section, enter cost and selling price to get profit, margin and markup.
  2. 2In the target price section, enter cost and the margin you want to see the required selling price.
  3. 3In the discount section, get the discounted price from a price and discount rate.
  4. 4If you know the discounted price and the rate, calculate the original price.
  5. 5Enter all amounts consistently either with or without VAT; use the VAT calculator for VAT.

Formulas

  • Profit = Selling price − Cost
  • Profit margin (%) = Profit ÷ Selling price × 100
  • Markup (%) = Profit ÷ Cost × 100
  • Price for a target margin = Cost ÷ (1 − Margin ÷ 100)
  • Discounted price = Price × (1 − Discount ÷ 100)
  • Original price = Discounted price ÷ (1 − Discount ÷ 100)

Frequently asked questions

What is the difference between margin and markup?

Margin divides profit by the selling price, markup divides it by cost. For the same item, markup is always higher than margin: with a cost of 80 and price of 100, margin is 20% and markup is 25%.

If I add 30% to my cost, is my margin 30%?

No. Adding 30% to cost is a 30% markup; the margin is about 23%. For a 30% margin the price is Cost ÷ 0.70.

Can profit margin be 100%?

No. Since margin is profit divided by price, it cannot reach 100% unless cost is zero. That is why the target margin field accepts values below 100; markup, however, can exceed 100%.

How do I find the original price from a 20% discounted price?

Divide the discounted price by (1 − 0.20), i.e. 0.80. A discounted price of 400 had an original price of 400 ÷ 0.80 = 500. Adding 20% to 400 (480) gives the wrong result.

Should I include VAT in these calculations?

Profit is usually calculated more accurately on amounts excluding VAT, because collected VAT is not business income. The key is to enter cost and price on the same basis.

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