Profit Margin Calculator
Find your profit margin from cost and selling price, or work backwards: enter a target margin to find the selling price or the maximum cost you can afford.
Profit Margin
Profit Margin
33.3%
Profit: ₹250 · Markup: 50.0%
Cost Price
₹500
Profit
₹250
Selling Price
₹750
How It Works
Profit margin and markup are both profitability ratios but measure different things, and confusing them is one of the most common pricing mistakes. Margin expresses profit as a percentage of the SELLING price: Margin = (Price − Cost) ÷ Price × 100. Markup expresses the same profit as a percentage of the COST: Markup = (Price − Cost) ÷ Cost × 100. A product costing ₹100 sold for ₹150 has a 50% markup but only a 33.3% margin — the two numbers are never equal (except at 0%), and margin is always smaller than markup for any profitable price. This calculator handles all three common questions: (1) given cost and price, find the margin; (2) given cost and a target margin, find the selling price you need to charge; (3) given a selling price and a target margin, find the maximum cost you can afford to stay profitable.
Formula
Margin % = (Selling Price − Cost) ÷ Selling Price × 100. Markup % = (Selling Price − Cost) ÷ Cost × 100. Price = Cost ÷ (1 − Margin/100).
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a % of the selling price: (Price−Cost)/Price. Markup is profit as a % of the cost: (Price−Cost)/Cost. A ₹100 cost sold at ₹150 is a 50% markup but only a 33.3% margin — markup is always higher than margin on a profitable sale.
How do I calculate selling price from a target margin?
Price = Cost ÷ (1 − Margin/100). For a 40% margin on a ₹600 cost item: Price = 600 ÷ (1 − 0.40) = 600 ÷ 0.60 = ₹1,000.
What is a good profit margin?
It varies widely by industry — retail often runs 20–50% gross margin, while software/SaaS can exceed 70–90% due to low marginal cost. Compare your margin to others in your specific industry rather than a universal benchmark.
Why can margin never reach 100%?
Margin = Profit/Price, and Price always includes the cost as part of it (unless cost is zero). As cost approaches zero, margin approaches 100% but mathematically never equals or exceeds it for any positive cost.
Is this gross margin or net margin?
This calculates gross margin — based only on cost of goods sold (COGS) and selling price. Net margin would further subtract operating expenses, taxes, and interest, which this tool does not include.