📊 Profit Margin Calculator
Calculate gross margin, net margin, markup and selling price for any product or service.
Frequently Asked Questions
How do I use the Profit Margin Calculator?
Choose a tab based on what you know: "Cost → Price" lets you enter Cost Price and Selling Price to see gross profit, margin and markup; "Price → Margin" adds an optional Operating Expenses field to also show net profit and net margin; "Target Margin" lets you enter a Cost Price and a Target Gross Margin to find the selling price you should charge. Results update automatically as you type.
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price (Profit / Selling Price × 100), while markup is profit as a percentage of the cost (Profit / Cost × 100). The two are always different for the same item — a 50% markup on cost gives a 33.3% margin on the selling price.
How do I calculate the selling price from cost and a target margin?
Selling Price = Cost / (1 − Target Margin / 100). For example, a cost of ₹100 with a target margin of 25% gives a selling price of ₹133.33.
What's the difference between gross margin and net margin?
Gross margin only accounts for the direct cost of the product (cost of goods sold), while net margin also factors in operating expenses, taxes and other overheads, giving a more complete picture of overall profitability.
How does this relate to my break-even point?
Your margin per unit is the contribution margin used to calculate break-even — the higher your margin, the fewer units you need to sell to cover fixed costs. Use our Break-Even Calculator to find your break-even point in units and revenue.
Can I use this price when creating an invoice or quotation?
Yes — once you've found your ideal selling price, add it as a line item rate in our Invoice Generator or Quotation Generator.
Why can't I enter a target margin of 100% or more?
The Target Margin tab limits input to a maximum of 99.99% because the selling price formula, Cost / (1 − Target Margin / 100), divides by zero at exactly 100% and produces a negative (meaningless) price above it. A margin approaching 100% means the cost is an infinitesimally small fraction of the selling price.
What does a negative margin mean?
A negative margin appears when your Selling Price is lower than your Cost Price, meaning you are selling at a loss on that item. Check this carefully if you've discounted a product heavily — a negative margin or markup signals the price needs to be raised to at least cover cost.