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Profit Margin Calculator

Price what you sell knowing how much you really make

With this profit margin calculator you see how much you make on the selling price, or what price to set to reach the margin you want. For stores, small businesses and resellers.

Result33.3%Margin on the priceProfit: $20.00 · Markup on cost: 50.0%Formula explained below · reviewed October 17, 2026
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10/17/2026last reviewed
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The key idea

Margin is not markup: it is what you keep from the price

If you buy at $40 and sell at $60, your markup is 50%, but your margin is 33.3%. Mixing them up makes you think you earn more than you do: adding 40% to the cost gives a 28.6% margin, not 40%.

01

How it is calculated

Margin = (Price − Cost) / Price. Markup = (Price − Cost) / Cost. They are not the same: a 50% markup is a 33.3% margin.

Price for a margin m = Cost / (1 − m)

Work out the margin before sales tax: the sales tax you collect is not yours, you pass it on to the state.

02

Worked example

You buy at $40 and sell at $60: profit $20, margin 33.3%, markup 50%. For a 40% margin on a $40 cost: 40 / 0.6 = $66.67.

By Javier Mohino · Reviewed on 10/17/2026 · How we review our calculators · Spot an error? Let us know

Typical cases

Margin vs markup chart

The selling price you need for each target margin on a $100 cost, and the markup that gives it. A 50% margin is a 100% markup, not 50%.

MarginPrice on a $100 costProfitMarkup on cost
10%$111.11$11.1111.1%
15%$117.65$17.6517.6%
20%$125.00$25.0025.0%
25%$133.33$33.3333.3%
30%$142.86$42.8642.9%
35%$153.85$53.8553.8%
40%$166.67$66.6766.7%
50%$200.00$100.00100.0%
60%$250.00$150.00150.0%
75%$400.00$300.00300.0%

Worked out with the calculator above, before sales tax. For another cost, multiply the price by the cost and divide by 100.

Table: Margin vs markup chart (Margin, Price on a $100 cost, Profit, Markup on cost)Save or share this table as an image

Common questions

Frequently asked questions

Back to the calculator
What is profit margin?

It is the share of the selling price you keep as profit: (price − cost) / price. If you sell for $60 something that costs you $40, your margin is 33.3%.

What is the difference between margin and markup?

Margin is calculated on the selling price and markup on the cost. A 50% markup equals a 33.3% margin, and a 50% margin requires a 100% markup.

What price do I set for a 30% margin?

Divide the cost by 0.7. With a $40 cost, the price before sales tax is $57.14.

Why is adding a percentage to the cost not enough?

Because adding 40% to the cost gives a 28.6% margin, not 40%. If you think in margin, use the formula cost / (1 − margin).

Do I calculate margin with or without sales tax?

Without it. The sales tax you collect goes to the state, so work out your margin on the price before tax and add the tax afterward.

What goes into the cost?

Everything it takes to put the product up for sale: purchase price, shipping, marketplace or card processing fees and packaging. If you leave one out, your real margin will be lower than the result.

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