Profit Margin Calculator
Calculate gross profit margin, selling price, or cost from any two known values. Returns both margin and the equivalent markup percent.
Profit margin details
Selling price
$100.00
- Cost
- $50.00
- Selling price
- $100.00
- Profit
- $50.00
- Margin %
- 50.00%
- Markup %
- 100.00%
Frequently Asked Questions about the Profit Margin Calculator
What is gross profit margin?
Gross margin is profit (selling price minus cost) divided by selling price, expressed as a percentage. A $100 sale with $40 cost gives $60 profit and a 60% gross margin.
Why can margin never exceed 100%?
Margin is profit as a fraction of revenue. Profit cannot be larger than revenue (assuming cost is non-negative), so margin caps at 100%, which would require zero cost.
What does a healthy margin look like?
It depends on the business. SaaS companies often target 70 to 80% gross margins, restaurants run 60 to 70% on food, grocery stores survive at 20 to 30%. Net margins (after operating costs) are always lower.
How do I compute selling price from cost and desired margin?
Selling price = cost / (1 - margin / 100). For cost $60 and a 40% target margin, selling price is 60 / 0.6 = $100. The calculator does this for you.
How do markup and margin convert?
Margin = markup / (1 + markup). A 100% markup converts to 50% margin; a 50% margin converts to 100% markup. The calculator always shows both numbers so you can sanity-check pricing decisions.