Margin Calculator
Enter what an item costs you and what you sell it for — the calculator shows the profit, the gross margin, the markup, how much of your price is cost, and the price you would need for a 30% margin.
Margin versus markup — the classic mix-up
Both numbers describe the same profit but divide it by different things. Margin is profit ÷ selling price: a 100 price on a 60 cost is a 40% margin. Markup is profit ÷ cost: the same deal is a 66.7% markup. Accountants, retailers and tax authorities usually talk in margins; traders quoting "mark it up by half" mean markup.
The gap grows with profitability: a 25% margin is a 33% markup, while a 50% margin is a 100% markup. Mixing them up when setting prices systematically underprices — a "50% margin" calculated as a 50% markup actually delivers only 33%.
Pricing to a target margin
To hit a target margin M, price = cost ÷ (1 − M). The last line of the result shows this for a 30% margin — replace 0.3 with your own target in any spreadsheet. Working this direction avoids the round-trip error of guessing a price, checking the margin and nudging it repeatedly.
Remember the calculator works on unit cost. If your overheads (rent, salaries, marketing) sit outside the unit cost, the true margin on the business is lower — price from the fully-loaded cost if you want the margin to be real.
Frequently asked questions
What is the difference between margin and markup?
Margin divides profit by the selling price; markup divides it by the cost. A 40% margin equals a 66.7% markup on the same numbers — always check which one a conversation means.
How do I price for a 30% margin?
Divide the cost by 0.7 (that is 1 − 0.30). The calculator shows this price on the last line for a 30% target; the same formula works for any target margin.
Why is my margin different from my industry's?
Published margins are usually net of overheads and discounts. This calculator uses the unit cost you enter — include shipping, fees and allocated overheads in it for a comparable figure.
Can margin be over 100%?
Not on a positive price: profit can never exceed the selling price, so margin tops out approaching 100% only as cost approaches zero. Markup, however, is unbounded.
What if my cost is zero?
Margin and markup both become meaningless — the tool shows 100% cost share logic only for positive costs and flags the target price as not applicable.
Can I share a specific calculation?
Yes — cost and price travel in the URL, so a shared link reopens the exact numbers.