Profit Margin Calculator
Margin and markup sound alike but are two different numbers. This calculator computes both from your cost and selling price, or helps you find the right selling price for a target margin.
Result
25%
Profit margin (on selling price)
- Markup (on cost price)
- 33.33%
- Profit per unit
- £20.00
How this was calculated
- 1Calculate the profit£80.00 − £60.00 = £20.00
- 2Margin = profit ÷ selling price£20.00 ÷ £80.00 = 25%
- 3Markup = profit ÷ cost price£20.00 ÷ £60.00 = 33.33%
Formula
Margin = (selling price − cost price) ÷ selling price
The crucial difference: margin divides by the selling price, markup divides by the cost price. At a cost of € 60 and a sell price of € 80, profit is € 20 either way, but margin is 25% (20÷80) while markup is 33.3% (20÷60).
What the variables mean
- marge
- Profit as a percentage of the selling price
- opslag
- Profit as a percentage of the cost price
Worked examples
Cost € 60, sell price € 80
→ Margin 25%, markup 33.3%.
Cost € 60, target margin 40%
→ Selling price must be € 100.
Common mistakes
- Applying a markup percentage as if it were a margin (or vice versa), leading to the wrong selling price.
- Forgetting that a margin can never reach 100% or more (that would mean a cost of € 0), while a markup can.
When to use it
- Setting a selling price that yields a target profit margin.
- Comparing margins across products to assess profitability.
Frequently asked questions
What is a healthy profit margin?
This varies greatly by industry: retail often works with 20–50%, while services can reach 50% or more. Compare with industry peers rather than aiming for a fixed number.
Was this calculator helpful?