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Profit Margin Calculator

Free profit margin calculator to find gross margin, net margin, markup and profit, set a selling price for a target margin, and find your break-even point.

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Profit Margin Calculator

Margin, markup, pricing and break-even in one place

$50K
$30K
$10K
$0
PROFIT
$10K
COSTS
$40K
Profit 20%COGS 60%Expenses 20%
NET PROFIT
$10,000.00
GROSS MARGIN
40%
NET PROFIT MARGIN
20%
MARKUP
66.7%
Gross Profit
$20,000.00
Operating Margin
20%
Total Costs
$40,000.00
COGS % of Revenue
60%
Margin Insight: For every $1 of revenue you keep about 20 cents as net profit. Your gross margin is 40%, and operating expenses and other costs take 20% of revenue.
Profit Margin Calculator — Free Gross Margin, Net Margin and Markup Calculator on HighCalc

Profit Margin Calculator: Find Your Margin, Markup and Break-Even Point

Our free profit margin calculator shows how much of every sale you keep as profit. Enter your revenue, cost of goods sold and expenses to get gross profit, net profit, gross margin, net margin and markup. Two more tabs help you set a selling price for a margin or markup you want, and find how many units you must sell to cover your fixed costs.

Quick answer: with $50,000 in sales and $30,000 in cost of goods sold, your gross profit is $20,000 and your gross margin is 40.0%. After $10,000 of operating expenses, net profit is $10,000, a net margin of 20.0%. The same sale has a markup of 66.7%.

What Is Profit Margin?

Profit margin is the share of your revenue that remains as profit, shown as a percentage. A 20% margin means you keep 20 cents of every dollar you sell. It lets you compare products, months and businesses of different sizes, because it removes the effect of scale. Business owners use it to check pricing, control costs and judge whether growth is making money.

Gross marginGross margin % = (Revenue − Cost of goods sold) ÷ Revenue × 100
Net marginNet margin % = Net profit ÷ Revenue × 100

There are three common versions of margin, each counting more costs than the one before it.

TypeFormulaExample ($50,000 revenue)
Gross profit margin(Revenue − COGS) ÷ Revenue40.0%
Operating profit margin(Gross profit − Operating expenses) ÷ Revenue20.0%
Net profit marginNet profit ÷ Revenue20.0%

Margin vs Markup

Margin and markup describe the same profit from different directions. Margin divides profit by the selling price, while markup divides profit by the cost. Because the cost is always smaller than the price, markup is always the bigger number. If you add 50% to your cost, you have a 50% markup but only a 33.3% margin. The table shows the price you need on a $40 item for each margin.

MarkupMarkup % = (Selling price − Cost) ÷ Cost × 100
Profit marginMarkupSelling price on a $40 costProfit per item
10%11.1%$44.44$4.44
20%25.0%$50.00$10.00
25%33.3%$53.33$13.33
30%42.9%$57.14$17.14
40%66.7%$66.67$26.67
50%100.0%$80.00$40.00

Setting a Price for the Margin You Want

To reach a target margin, divide your cost by one minus the margin. A $40 item at a 40% margin sells for $66.67, which gives $26.67 of profit per item. Using the markup method on the same item, adding 40% to the cost would give only $56.00 and a margin of 28.6%. The Selling Price tab handles both methods and shows the totals for any number of items.

Break-Even Point

Your break-even point is the number of units at which sales cover all of your costs. Each unit contributes its price minus its variable cost toward your fixed costs. With $5,000 of fixed costs, a $25 price and $10 of variable cost, each unit contributes $15, so you need 334 units, about $8,350 in sales. Add a profit target to see how many units reach it. For borrowing to fund growth, try the loan calculator, and to check percentage changes in prices or costs, use the percentage calculator.

Using Your Margin to Make Decisions

A falling margin can mean rising costs, discounting or a shift to lower-priced products. A rising margin can mean better pricing, cheaper supply or a change in what you sell. Check gross margin first, because it shows whether the product itself is profitable, then check net margin to see whether running costs are eating the profit. Remember that profit is also subject to tax, which the tax calculator can estimate for an individual.

Who Uses a Profit Margin Calculator?

Small business owners, online sellers, freelancers pricing their services, retailers, restaurant owners, accountants and students learning business finance. Results are estimates based on the numbers you enter and are not financial advice.

How to Use This Profit Margin Calculator

1

Choose a tab

Use Profit Margin to analyze results, Selling Price to set a price, or Break-Even to find units needed.

2

Enter your revenue and costs

Add sales, cost of goods sold, and any operating or other expenses.

3

Or set a target

On the Selling Price tab, enter a cost and a target margin or markup.

4

Add fixed costs for break-even

On the Break-Even tab, enter fixed costs, price and variable cost per unit.

5

Click the button

See profit, margins, markup, a chart and a plain-language summary.

Features

Instant Results
Everything updates as you move a slider
Margin and Markup
See both numbers side by side to avoid pricing mistakes
Three Tools in One
Profit margin, selling price and break-even point
Profit Chart
See how revenue splits between profit and costs
Works Everywhere
Fully responsive on phone, tablet, and desktop
Private & Secure
All calculations run in your browser — nothing is stored
Frequently Asked Questions
Common questions about the Profit Margin Calculator.
How do you calculate profit margin?
Subtract your costs from your revenue to get profit, then divide the profit by revenue and multiply by 100. If you sell $50,000 of goods that cost $30,000 to make, gross profit is $20,000 and gross margin is 40.0%. After $10,000 of operating expenses, net profit is $10,000 and net margin is 20.0%.
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. They use the same profit but different bases, so markup is always higher. A 40% margin equals a 66.7% markup, and a 50% margin equals a 100% markup. Mixing them up is a common pricing mistake.
What is a good profit margin?
It depends on the industry, the size of the business and the cost structure. Businesses with low costs per sale, such as software, often have high margins, while retail and food businesses usually have lower ones. Compare your margin with similar businesses and with your own past results, and look at gross, operating and net margin separately.
How do I set a price for a target margin?
Divide your cost by one minus the margin you want. For a cost of $40 and a 40% margin, the price is $40 ÷ 0.60, which is $66.67. Use the Selling Price tab, choose margin or markup, and the calculator shows the price, the profit per item and the totals for any number of items.
What is the difference between gross, operating and net profit margin?
Gross margin looks only at revenue minus the direct cost of goods sold. Operating margin also subtracts running costs such as rent, wages and marketing. Net margin subtracts everything, including interest, taxes and other expenses, so it shows what is left for the owner. Each one answers a different question about the business.
How do I find my break-even point?
Divide fixed costs by the profit each unit contributes after its variable costs. With $5,000 in fixed costs, a $25 price and $10 in variable costs, each unit contributes $15, so you need 334 units, or $8,350 in sales, to break even. Add a target profit on the Break-Even tab to see how many units reach it.