Profit Margin Calculator

Profit Margin Calculator
CALCULATOR

Profit Margin Calculator

Calculate your profit, profit margin, and markup from your selling price and cost.

Instant & Accurate
Please enter valid values. Selling price must be greater than zero and cost cannot be negative.
Profit Margin
0.00%
Profit as a percentage of your selling price
Profit $0.00
Markup 0.00%
Cost $0.00
Formula
Profit = Selling Price − Cost
Profit Margin = (Profit ÷ Selling Price) × 100
Quick Examples
$500 · $300 Selling price · Cost
$1,000 · $600 Selling price · Cost
$2,500 · $1,500 Selling price · Cost
What is the Profit Margin Calculator used for?

The Profit Margin Calculator is used to determine how much profit a business earns as a percentage of its revenue. It compares the money received from sales with the costs involved in providing the product or service. The result, known as the profit percentage, can help show how much of each sales dollar remains after costs are accounted for.

 

To calculate profit margin, first subtract the total cost from revenue to find the profit. Then divide the profit by revenue and multiply by 100. For example, if a product generates $800 in revenue and costs $500, the profit is $300. The profit calculation is therefore $300 ÷ $800 × 100 = 37.5%.

 

 

Revenue is the total money received from selling products or services. Cost is the amount spent to produce or provide what was sold. Profit is what remains after subtracting cost from revenue. For example, if sales revenue is $2,000 and the related costs are $1,400, the resulting profit is $600. These three figures form the basis of a margin percentage calculation.

 

 

Yes. If you know your sales revenue and the related cost, you can calculate the margin by first finding the difference between them. That difference is the profit. For example, sales of $5,000 with costs of $3,500 produce $1,500 in profit, resulting in a 30% margin. This approach can also be used when reviewing cost of goods sold against sales revenue.

 

 

Changing the selling price can change the profit margin when costs remain the same. If the price increases while the cost does not, the profit per sale rises and the margin generally increases. Conversely, lowering the selling price reduces the amount left after costs. For example, a product costing $40 and selling for $60 has a different margin from the same product sold for $50.

 

 

One common mistake is confusing profit margin with markup. Margin measures profit as a percentage of revenue, while markup measures profit relative to cost. Another error is using the wrong cost figure or dividing profit by cost instead of revenue. Always identify the correct sales revenue, total cost, and profit before applying the margin calculation. This keeps the result consistent with the standard formula.