Calculate profit margin, markup and target prices
The profit margin calculator turns a cost and a selling price into the three numbers every seller needs: gross profit, gross margin % and markup %. It also works backwards — enter your cost and the margin you want to earn, and it tells you what to charge; or enter a market price and a target margin to find the most you can pay a supplier. Two GST modes turn a cost and a target margin (or markup) into a GST-inclusive selling price, or reveal the real margin hidden in a price that already includes GST.
Margin and markup are easy to confuse, and the mix-up quietly costs money. This calculator shows both side by side, with a table of equivalents for your own cost.
How to use the Profit Margin Calculator
- Choose what you want: “Margin from cost & price”, “Price for a target margin” or “Max cost for a target margin”.
- Enter your cost per unit — what you paid to make or buy one item — and pick your currency.
- Enter the selling price, or the gross margin you are aiming for, depending on the mode.
- Read the result, the gross profit, margin and markup, and the bar showing how the price splits into cost and profit.
- For GST: pick “Selling price with GST”, enter the cost before GST, the margin or markup and the rate, and read the price to print on the tag.
- Use the equivalents table to see the selling price and profit at common margins for the same cost.
Profit Margin Calculator features
Three ways to price
Find the margin of a price, the price for a target margin, or the maximum cost for a margin.
Margin and markup together
Both percentages are shown for every calculation, so you never quote one as the other.
Loss detection
If the cost is above the price, the margin turns negative and the bar shows the loss in red.
Selling price with GST
Cost plus target margin or markup gives the price before tax; adding GST gives the MRP-style price. Or start from a tax-inclusive price and see your true margin.
Equivalents table
Common margins with their markup, price and profit for your cost.
Formula shown
Each answer includes the calculation with your numbers.
Profit margin formulas
Gross profit = selling price − cost. Gross margin % = gross profit ÷ selling price × 100. Markup % = gross profit ÷ cost × 100. Margin is a share of the price; markup is a share of the cost, so markup is always the larger number when you make a profit.
Worked example: a product costs ₹600 and sells for ₹1,000. Gross profit is ₹400, the margin is 400 ÷ 1,000 = 40%, and the markup is 400 ÷ 600 = 66.67%.
Price for a target margin: price = cost ÷ (1 − margin ÷ 100). To earn a 25% margin on an item costing $75, charge 75 ÷ 0.75 = $100. Adding 25% to the cost ($93.75) only gives a 20% margin.
Maximum cost for a target margin: cost = price × (1 − margin ÷ 100). If the market price is £200 and you need a 30% margin, you can pay at most £140.
To convert between them: markup = margin ÷ (1 − margin) and margin = markup ÷ (1 + markup), using decimals. A 50% margin is a 100% markup; a 100% markup is a 50% margin.
Selling price with GST
GST is collected for the government, so your margin is measured on the price before GST. Work in two steps: price before GST = cost ÷ (1 − margin) (or cost × (1 + markup)), then GST-inclusive price = that × (1 + GST rate). A cost of ₹600 with a 40% margin gives ₹1,000 before GST and ₹1,180 at 18%. Entering ₹1,180 in reverse returns the ₹1,000 and the 40% margin. Enter the cost without GST if you claim it back as input credit.
Since 22 September 2025 most goods and services are taxed at 5% or 18%, with 40% on a short list of luxury and sin goods; the rate box accepts any value, including old 12% and 28% rates, and VAT. Confirm your product’s rate with the GST calculator; this is a formula, not tax advice.
Gross, operating and net margin
This tool calculates gross margin, which only subtracts the direct cost of the goods sold — materials, stock, direct labour or the wholesale price. Operating margin also subtracts running costs such as rent, salaries, software and marketing, and net margin subtracts everything, including interest and tax.
Enter a cost that includes everything you pay per unit: purchase price, shipping in, packaging and platform or payment fees. The VAT calculator strips tax from other prices.
Tips for using margins in practice
- Check a sale before you run it: a 20% discount on a product with a 30% margin removes two-thirds of your profit. Try it with the discount calculator.
- Know how many units you must sell to cover fixed costs with the break-even calculator.
- Results are estimates for planning and are not financial or accounting advice.
Profit Margin Calculator FAQ
How do I calculate profit margin?
Subtract the cost from the selling price to get gross profit, divide it by the selling price and multiply by 100. Selling for 250 an item that costs 175 gives (250 − 175) ÷ 250 × 100 = 30% gross margin.
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. On a cost of 60 and a price of 100, profit is 40, the margin is 40% and the markup is 66.67%.
How do I set a price to get a 30% margin?
Divide the cost by 0.70 (that is, 1 − 0.30). An item costing 140 must sell for 200 to earn a 30% margin. Use the “Price for a target margin” mode.
Can profit margin be more than 100%?
No. Margin is a share of the price, so it can approach 100% only if the cost approaches zero. Markup has no upper limit — a 300% markup is possible and equals a 75% margin.
What is a good profit margin?
It depends on the industry, volume and running costs. Compare with similar businesses and make sure gross margin covers all overheads.
Is profit percentage the same as margin?
Not always. In many Indian school textbooks, “profit percentage” means profit ÷ cost price × 100, which is the markup. Businesses usually mean margin. Both are shown here.