Profit margin and markup calculator
Know what you actually keep. Start from cost and price, or from the margin or markup you want, and see the price, the profit, and both percentages side by side.
Margin is not markup
The markup you need to add to cost for each margin you want to keep. Mixing the two up is the most common pricing mistake.
| Target margin | Markup needed | Price for a cost of 100 | Profit |
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Questions
Built by Mohd Shayan. Found a problem or have an idea? Send a note.
What is the difference between margin and markup?
Both compare profit with something else. Margin is profit as a share of the selling price. Markup is profit as a share of the cost. An item that costs ₹100 and sells for ₹150 has a profit of ₹50: a 33.3% margin and a 50% markup.
How do I calculate profit margin?
Margin = (price − cost) ÷ price × 100. Markup = (price − cost) ÷ cost × 100.
How do I price for a target margin?
Divide the cost by one minus the margin: price = cost ÷ (1 − margin ÷ 100). For a 40% margin on a ₹60 cost, the price is ₹60 ÷ 0.6 = ₹100. Adding 40% to the cost instead would give ₹84, which is only a 28.6% margin.
Can margin be more than 100%?
No. Margin can approach 100% but never reach it, because profit can never be larger than the price. Markup has no ceiling: selling a ₹10 item for ₹50 is a 400% markup but an 80% margin.
Should cost include tax?
Use the cost and price you actually keep. If you charge GST and claim input credit, work with amounts before GST on both sides, since the tax passes through to the government.
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