Margin Calculator to Set Profitable Prices Fast
Enter your total cost before applying any markup or margin.
Choose whether you want to target a percentage margin or a fixed profit amount.
Use positive or negative percentages to model profit or discount margins. Enter the exact profit you want to earn on top of the cost.
Adjust the selling price to instantly see how your margin responds.
Set a desired profit to discover the price and margin that make it possible.
Try an example scenario
Pricing outlook
Gross margin
Share of revenue that turns into profit.
Markup on cost
How much you add on top of cost to set the price.
Cost share of revenue
Portion of each sale consumed by costs.
How to Use This Calculator
- • Start with cost plus a margin to discover the minimum profitable price.
- • Test alternative prices by editing revenue—the tool updates profit and margin instantly.
- • Switch between percentage and cash margins to match how your team plans pricing.
Table of Content
Margin Explain
Margin (Profit Margin) — How much profit you keep from each sale.
Formula: (Profit ÷ Revenue) × 100.
Example: ₨30 profit on ₨150 revenue = 20% margin.
Cost — What it takes to make or deliver the product/service (materials, labour, overhead).
Tip: Track all direct + indirect costs to avoid underpricing.
Revenue (Selling Price) — The money you receive from the sale.
Formula: Units Sold × Price per Unit.
Profit — What’s left after paying costs.
Formula: Revenue − Cost.
Example: ₨150 revenue − ₨120 cost = ₨30 profit.
Markup — How much you add on top of the cost to set the price.
Formula: (Profit ÷ Cost) × 100.
Example: ₨30 profit on ₨120 cost = 25% markup.
Quick note: Margin is based on revenue; markup is based on cost—they’re related but not the same.
Gross Profit Margin
What is Gross Profit Margin?
Gross profit margin shows how much of your revenue remains after subtracting cost of goods sold (COGS), but before operating expenses like rent, salaries, and marketing.
Formula: ((Revenue − COGS) ÷ Revenue) × 100
By default, most margin calculators report gross margin—unless you enter figures for net sales and net profit.
Why it matters
Profit margin tells you how much profit you earn for every unit of revenue. It’s a fast way to gauge pricing, health, and business efficiency.
Know the building blocks
- Revenue: What you charge customers.
- Cost/COGS: What it costs to produce or fulfil.
- Profit: Revenue − Cost.
- Margin vs. Markup: Margin is based on revenue; markup is based on cost.
When costs rise but revenue doesn’t
If production costs increase and prices stay the same, gross margin shrinks. You’re paying more to make the product while bringing in the same revenue.
Two ways to protect the margin
- Adjust markup (raise prices) thoughtfully.
- Pros: Restores target margin fast.
- Cons: Risk of price-sensitive customers churning.
- Hold prices; grow volume.
- Pros: Keep customers happy, expand market share.
- Cons: Requires stronger marketing and fulfilment capacity.
Pro tip: Test both tactics. Start with small price experiments, track conversion and churn, and use a margin calculator to watch margin, markup, and profit in real time.
How to Calculate Margin
Keep these clean, copy-ready formulas at hand when pricing or reviewing examples.
Core relationships
Profit = Revenue − Cost
Revenue = Cost + Profit = Cost × (1 + Markup as decimal)
Profit Margin (%) = (Profit ÷ Revenue) × 100
Markup (%)= (Profit ÷ Cost) × 100
Rearranging to find any variable
Profit = Revenue × (Margin% ÷ 100)
Cost = Revenue − Profit = Revenue × (1 − Margin% ÷ 100)
Cost = Profit ÷ (Markup% ÷ 100)
Revenue = Cost ÷ (1 − Margin% ÷ 100)
Quick example
Cost = 80, Markup = 25% → Revenue = 80 × (1 + 0.25) = 100
Profit = 100 − 80 = 20 → Margin = (20 ÷ 100) × 100 = 20%
Margin vs Markup Made Simple
Margin shows profit as a share of the selling price.
Markup shows profit as a share of the cost.
Margin (%) = (Profit ÷ Revenue) × 100
Markup (%) = (Profit ÷ Cost) × 100
Quick example:
If something costs 80 and sells for 100, the profit is 20.
Margin = 20/100 = 20%. Markup = 20/80 = 25%.
Easy rule of thumb:
Thinking about the sales price? Use Margin.
Thinking about cost? Use markup.
Convert fast (use decimals):
- Markup = Margin ÷ (1 − Margin)
- Margin = Markup ÷ (1 + Markup)
Keep both in your toolkit. Margin helps you hit target profitability. Markup enables you to set prices from costs—without guesswork.
Helpful calculators to plan pricing and profits
Price smarter with our margin tools, then plug the numbers into the right helper—map payments with the amortization calculator, compare rates using the monthly to annual APR calculator, and lower costs with the Auto Refinance Calculator. Want to drop PMI sooner? Plan a faster payoff with the mortgage payoff calculator.
Buying with a VA loan? Check your eligibility and cash flow using the VA residual income calculator. Then, check limits with the VA home loan debt-to-income tool. Saving for land or a bigger down payment? Run the land loan calculator and estimate payments with the mortgage calculator. For staffing and pricing, use the salary-to-hourly calculator to convert wages. You can measure price changes with the percentage increase calculator.
API Documentation Coming Soon
Documentation for this tool is being prepared. Please check back later or visit our full API documentation.
Frequently Asked Questions
-
Want a 20% profit margin? Turn 20% into 0.20, then find the price by dividing your cost by 0.80 (because 1 − 0.20 = 0.80).
Formula: Selling Price = Cost ÷ 0.80.
Example: If your cost is $40, price = $40 ÷ 0.80 = $50.
-
A “good” profit margin depends on your industry and business model, but never accept negative gross or net margins.
As simple benchmarks, ~5% net is weak, ~10% is fair, and ~20% is strong for many businesses.
Check your industry averages and your stage of growth to set realistic targets.
Improve margin by trimming waste, pricing for value, and focusing on higher-margin products or services.
Review costs and pricing monthly, and use a margin calculator to track progress with clear, simple numbers.
-
Want a 10% profit margin? Convert 10% to 0.10, then divide your cost by 0.90 (since 1 − 0.10 = 0.90) to get the selling price.
Formula: Selling Price = Cost ÷ 0.90.
Example: If your cost is $45, price = $45 ÷ 0.90 = $50.
It keeps your margin at 10% while covering costs. For accuracy across many items, use a margin calculator to check your numbers fast.
-
Want a 30% profit margin? Convert 30% to 0.30, then divide your cost by 0.70 (because 1 − 0.30 = 0.70) to get the selling price.
Formula: Selling Price = Cost ÷ 0.70.
Example: If your cost is $70, price = $70 ÷ 0.70 = $100.
This price delivers a clean 30% margin while covering costs. Use a margin calculator to double-check your numbers fast.
-
To turn margin into markup, use simple steps and a one-line formula.
Formula: Markup = Margin ÷ (1 − Margin)
Steps:
- Convert the margin percent to a decimal.
- Divide that decimal by (1 − margin).
- Multiply by 100 to get a percentage.
Example: Margin 25% → 0.25 ÷ (1 − 0.25) = 0.25 ÷ 0.75 = 0.3333 → 33.33% markup.
Use a margin calculator to confirm your result in seconds.