How to use the Profit Margin Calculator
- Enter your cost and selling price to see profit, margin and markup.
- Or enter your cost and a target margin to find the right selling price.
Margin vs markup
Margin = (Price − Cost) ÷ Price × 100
Markup = (Price − Cost) ÷ Cost × 100
An item that costs 600 and sells for 1,000 has a profit of 400, a margin of 40% and a markup of 66.7%. Margin is measured against the selling price, markup against the cost — confusing the two is a common pricing mistake.
Price for a target margin
Price = Cost ÷ (1 − Margin ÷ 100)
To earn a 40% margin on an item costing 600: 600 ÷ 0.60 = 1,000. Simply adding 40% to the cost (840) would give only a 28.6% margin.
Frequently asked questions
What is a good profit margin?
It depends on the industry. Retail and food often run on 5–20% net margins, while software and services can be much higher. Compare with businesses like yours.
Does this include GST?
Enter cost and price excluding GST, since GST collected is paid to the government and is not profit.