Margin & Markup Calculator
Calculate profit margin, markup, cost, and selling price. See the relationship between margin and markup instantly.
Disclaimer: This calculator is for general educational and informational purposes only. It does not constitute financial advice, investment advice, tax advice, or legal advice and is not a substitute for consultation with a qualified professional. No fiduciary or advisory relationship is created by your use of this tool. Results are estimates based on the inputs you provide, standard mathematical formulas, and publicly available data that may not be current and may not reflect your individual financial situation, applicable tax laws, or other relevant factors. Neither MayoCalc nor Cook Media Systems assumes any liability for losses, damages, or other consequences arising from the use of any information or results provided by this tool. Always consult a qualified financial advisor, certified public accountant, or attorney before making financial decisions. See our full
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What Is Profit Margin?
Profit margin measures how much profit a business keeps from each dollar of revenue. It is expressed as a percentage: a 30% margin means $0.30 of profit for every $1.00 of revenue. Margin is one of the most important metrics for evaluating business health, pricing strategy, and operational efficiency. There are several types: gross margin (revenue minus cost of goods sold), operating margin (after operating expenses), and net margin (after all expenses including taxes and interest).
Margin = (Revenue - Cost) / Revenue x 100
Markup = (Revenue - Cost) / Cost x 100
How to Use This Calculator
Enter any two of the three values: cost, revenue, and profit (or margin percentage). The calculator solves for the missing value and shows both margin and markup. Margin and markup are different calculations from the same numbers: a 50% markup on a $10 cost produces $15 revenue, but the margin is only 33% (profit of $5 divided by revenue of $15).
Margin vs. Markup
This is one of the most common sources of confusion in business. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. A 100% markup on a $50 item means you sell it for $100, but your margin is 50%, not 100%. Always clarify which metric you are using when discussing pricing, as the numbers can be dramatically different.
Margin Calculator FAQ
What is a good profit margin?
It varies enormously by industry. Grocery stores operate on 1-3% net margins. Software companies often exceed 20-30%. Consulting services typically run 15-25%. The right margin for your business depends on your industry, scale, and competitive position. Compare your margins to industry benchmarks rather than absolute numbers.
How do I increase my margin?
Two levers: increase revenue (raise prices, upsell, improve product mix) or decrease costs (negotiate supplier terms, reduce waste, improve efficiency). Raising prices by even 1-2% can significantly improve margins if customer retention stays high. Cutting costs has limits; pricing optimization is often the higher-impact strategy.