Margin Calculator
Calculate profit margin from cost and selling price, or find the selling price needed for a target margin. Shows margin, markup, and profit side by side.
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Results
—profit margin
Cost—
Selling Price—
Profit—
Markup %—
Profit Multiplier—
Formula Used
Margin = ((Revenue − Cost) ÷ Revenue) × 100
What Is Profit Margin?
Profit margin is the percentage of revenue that remains as profit after subtracting costs. It measures how efficiently a business converts revenue into profit. A higher margin means more profit per dollar of sales.
Margin Formula
Margin % = ((Selling Price − Cost) ÷ Selling Price) × 100
Margin vs. Markup
Margin and markup are both measures of profit, but they use different denominators:
| Metric | Formula | Base |
|---|---|---|
| Margin | (Profit ÷ Revenue) × 100 | Selling price |
| Markup | (Profit ÷ Cost) × 100 | Cost |
Margin to Markup Conversion
| Margin % | Markup % | Multiplier |
|---|---|---|
| 10% | 11.1% | 1.11× |
| 15% | 17.6% | 1.18× |
| 20% | 25.0% | 1.25× |
| 25% | 33.3% | 1.33× |
| 30% | 42.9% | 1.43× |
| 33.3% | 50.0% | 1.50× |
| 40% | 66.7% | 1.67× |
| 50% | 100.0% | 2.00× |
| 60% | 150.0% | 2.50× |
| 75% | 300.0% | 4.00× |
Average Profit Margins by Industry
| Industry | Gross Margin | Net Margin |
|---|---|---|
| Software / SaaS | 70-85% | 20-40% |
| Professional Services | 50-70% | 15-25% |
| E-commerce | 40-60% | 10-20% |
| Manufacturing | 25-35% | 5-10% |
| Retail | 25-50% | 2-5% |
| Restaurant | 60-70% | 3-9% |
| Grocery | 25-30% | 1-3% |
| Construction | 20-35% | 5-10% |
Margin Calculator FAQ
The percentage of revenue kept as profit. Margin = ((Revenue − Cost) ÷ Revenue) × 100. A 40% margin on $100 revenue = $40 profit.
Margin = profit ÷ revenue. Markup = profit ÷ cost. Same $40 profit on $100 sale: 40% margin but 66.7% markup.
Price = Cost ÷ (1 − Margin%). For $60 cost at 40% margin: $60 ÷ 0.60 = $100.
Varies by industry. SaaS: 20-40% net. Retail: 2-5% net. Services: 15-25% net. Compare to your industry average.