Profit Margin Calculator

Gross margin is profit divided by selling price, expressed as a percentage. Profit is selling price minus cost, so a product that costs $40 and sells for $100 earns $60 profit and a 60% gross margin. The calculator uses this standard revenue-based definition throughout.

Margin measures profit as a share of revenue. Profit can equal revenue only if cost is zero, which gives exactly 100%. Any positive cost makes profit smaller than revenue, so margin stays below 100%. The calculator rejects inputs of 100% or more in the modes that solve for selling price or cost, because the math produces undefined or negative results.

It depends entirely on the industry. SaaS businesses often target 70-80% gross margins, restaurants typically run 60-70% on food, and grocery stores operate on 20-30%. These are gross figures; net margin (after rent, payroll, and overhead) is always lower. Compare your margin to industry benchmarks rather than a universal standard.

Selling price = cost / (1 - margin / 100). With a $60 cost and a 40% target margin, selling price = 60 / (1 - 0.40) = $100. Pick the mode that solves for selling price, enter your cost and desired margin, and the calculator does the arithmetic for you.

They measure the same profit from different baselines. Margin uses selling price as the denominator; markup uses cost. To convert: margin% = markup% / (100 + markup%) x 100, and markup% = margin% / (1 - margin% / 100). A 100% markup equals a 50% margin; a 25% margin equals a 33.3% markup. The calculator displays both figures on every result so you can cross-check your pricing.