Enter cost and selling price to get the gross margin percentage, the profit, and the markup — with the margin-vs-markup difference made explicit.
Margin and markup are not the same number
Margin is profit as a share of revenue; markup is profit as a share of cost. Mixing them up is one of the most expensive small-business spreadsheet errors, because markup is always the bigger number — pricing for a “40% margin” using the markup formula quietly under-prices everything.
How to use it
- Enter your cost.
- Enter the revenue (selling price).
- Read the margin, the profit, and the markup side by side.
The formula
margin % = (revenue − cost) ÷ revenue × 100
markup % = (revenue − cost) ÷ cost × 100
A worked example
The calculator opens with a cost of 60 and revenue of 100. The profit is $40, which is a 40% margin (40 ÷ 100) — but a 66.67% markup (40 ÷ 60). Same sale, two very different percentages, and both are correct for their own question. Change any field and every figure updates as you type.
Common questions
What margin should I aim for?
It varies wildly by industry — groceries run thin, software runs thick. Compare against your own sector, not a universal number, and remember this is an estimate tool, not business advice.
How do I price for a target margin?
Divide cost by (1 − margin). For a 40% margin on a $60 cost: 60 ÷ 0.6 = $100 — exactly the opening example.
Is this gross or net margin?
Gross — revenue minus the direct cost only. Net margin also subtracts operating costs, tax and the rest of the overhead.