Margin calculator.
Price from a target profit margin. Enter your cost and the margin you want and see the selling price, the profit and the matching markup.
Cost and margin
LiveMargin is the profit as a share of the selling price. The markup, shown below, is the same profit measured against the cost.
Selling price
$166.67
at 40% margin
A pricing estimate, not financial advice; taxes and fees are not included. Calculations run in your browser; nothing you enter is stored.
How it works
From margin to price
A profit margin is the share of the selling price that is profit. To hit a target margin, the calculator divides your cost by one minus the margin, which gives the price that leaves exactly that share as profit. It then shows the profit and the matching markup.
A $100 item at a 40% margin sells for $166.67, a $66.67 profit. That same profit is a 66.7% markup, because markup is measured against the cost, not the price.
Reference
Margin to markup.
The same profit expressed two ways. A margin is always a smaller number than the markup it needs.
| Profit margin | Markup |
|---|---|
| 5% | 5.26% |
| 10% | 11.11% |
| 15% | 17.65% |
| 20% | 25.00% |
| 25% | 33.33% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100.00% |
| 60% | 150.00% |
The full guide
The complete margin guide.
What margin is, how it differs from markup, and how to price for the profit you need.
What is profit margin?
Profit margin is the profit on a sale expressed as a percentage of the selling price. If you sell for $166.67 and $66.67 of that is profit, the margin is 40%. It tells you how much of every dollar of revenue you keep.
Because it is measured against the price, margin can never reach 100%, and it is the figure most businesses track to judge profitability.
Margin versus markup
Margin and markup describe the same profit from two angles. Margin is profit as a share of the price; markup is profit as a share of the cost. Since the price is larger than the cost, the margin is always the smaller number. A 40% margin is a 66.7% markup.
Confusing the two leads to underpricing, so always be clear which one a target or a supplier refers to. The table above lines them up.
How to price from a target margin
Decide the margin you need, then divide the cost by one minus that margin as a decimal. For a 40% margin, divide the cost by 0.6. That gives the selling price that leaves exactly the margin you wanted.
Working from the margin, rather than adding a markup at random, is the reliable way to make sure each sale covers its share of your costs.
Choosing a healthy margin
A workable margin has to cover more than the product itself. It needs to pay for overheads like rent, wages and fees, and still leave a real profit. Margins vary widely by industry, from thin grocery margins to high software ones.
Start from the margin your business needs to run, then price every product to deliver it, and revisit it as your costs change.
The formula
Price from
margin.
Margin is profit as a share of the price. Divide the cost by one minus the margin to find the price that leaves the profit you want.
Try the markup calculator ›# Selling price from margin
price = cost / (1 − margin)
profit = price − cost
markup = profit / cost
# worked example
100 / (1 − 0.40) = 166.67Questions
Margin questions.
How do I calculate selling price from margin?
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Divide the cost by one minus the margin as a decimal. For a 40% margin, divide the cost by 0.6. So a $100 cost at a 40% margin sells for $166.67.
What is the difference between margin and markup?
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Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The margin is always smaller. A 40% margin equals a 66.7% markup.
How do I convert margin to markup?
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Divide the margin by one minus the margin. A 40% margin is 0.4 divided by 0.6, which is 0.667, or a 66.7% markup. The table on this page lists common values.
What is a good profit margin?
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It depends on your industry and costs. A good margin covers your overheads and still leaves a profit. Some sectors run on thin margins and high volume, others on much higher ones.
Is this margin calculator free?
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Yes. It is completely free with no sign-up, and every calculation runs locally in your browser, so nothing you enter is stored or sent anywhere.
About the developer
Jean Borg
Jean builds and maintains every calculator on freecalculators.pro from Malta, with a focus on tools that are fast, free and show their working. The margin calculator uses the standard pricing formulas and is provided for general business use, not financial advice.