What is the difference between margin and markup?

Both describe the same profit, but against different bases. Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. A 50% markup equals a 33.3% margin, so quoting one when you mean the other misprices the product.

How do I calculate profit margin?

Subtract cost from selling price to get gross profit, divide that by the selling price, then multiply by 100. If an item costs 60 and sells for 100, the margin is (100 − 60) ÷ 100 = 40%.

How do I convert markup to margin?

Divide the markup by one plus the markup. A 50% markup becomes 0.5 ÷ 1.5 = 33.3% margin. Going the other way, divide the margin by one minus the margin.

Do stacked discounts add up?

No. Applying 20% and then a further 10% is not 30% off, because the second discount applies to the already-reduced price. The combined effect is 28%.

What is a good profit margin?

It depends heavily on the industry. Grocery retail runs on low single digits, while software and consultancy can run far higher. Comparing against your own sector is far more useful than any universal benchmark.

Should margin be calculated before or after tax?

Before. VAT and sales tax are collected on behalf of the tax authority and are not your revenue, so margin should always be worked out on net figures.

How do I find my break-even point?

Divide total fixed costs by the contribution margin per unit, which is the selling price minus the variable cost per unit. That gives the number of units you need to sell to cover your fixed costs.

Business Calculators

Pricing math you can check: margin, markup, discounts and break-even, each showing the formula alongside the result so you can see exactly how the number was reached.

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Pricing decisions get made quickly and then live for a long time. Someone sets a markup on a Tuesday, and two years later the whole product line is still built on it. The arithmetic behind those decisions is simple, which is precisely why it is worth getting right — the errors are rarely complicated, they are just quietly expensive.

The most common one is confusing margin with markup. They describe the same profit against different bases, and the gap between them is wider than most people expect: a 50% markup is only a 33.3% margin. Quote one when you meant the other and you have mispriced everything you sell. These calculators show both figures side by side for that reason.

Each tool also shows the formula it used. That is deliberate. A calculator that only produces a number teaches you nothing and cannot be checked; one that shows its working lets you sanity-test the result and reuse the method in a spreadsheet later. If you disagree with an answer, you can see immediately where the disagreement is.

Free

Profit Margin Calculator

This is the one to start with, because it answers the question the others depend on: what do you actually keep on a sale? Enter cost and price to get gross profit, margin and markup together, or set a target margin and let it work backwards to the price you need to charge.

Open Profit Margin Calculator

What it does

Gross profit, margin and markup at once
Solve for profit, selling price or cost
Per-unit and batch quantities
Clear margin-versus-markup comparison
Formulas shown alongside results

Margin and markup, side by side
The single most expensive pricing mistake is treating these as the same number. Both are shown together, always, so the difference is impossible to miss.
The formula is shown with the result
You can check the working rather than trusting a black box, and reuse the same method in a spreadsheet when you need to.
Solve in any direction
Enter cost and price to get margin, or a target margin to get the price. The unknown can be whichever figure you actually lack.
See the effect of a change immediately
Adjust a cost or a discount and the downstream numbers move as you type, which makes the sensitivity of a price obvious rather than theoretical.
Built on net figures
Margin is calculated on net amounts, not gross. Comparing gross revenue against net costs is a reliable way to convince yourself an unprofitable product is fine.
No spreadsheet to maintain
No formula to copy wrong, no cell reference to break, and nothing that stops working when the person who built the sheet leaves.

An e-commerce seller
Working out whether a promotion is affordable
A supplier offers a slot in a seasonal campaign at 25% off. Before agreeing, you check what that discount does to margin on the affected products — and discover two of them fall below the point where the sale is worth fulfilling. You promote the other four instead.
A consultant
Pricing backwards from a target
You know what the engagement needs to earn, not what to charge. You enter your cost and the margin you want, and the calculator returns the price that produces it — then you check the markup figure so you are quoting the right percentage if the client asks.
A founder
Finding the volume that covers fixed costs
Rent, software and one salary come to a fixed monthly figure. Entering that alongside your unit price and variable cost gives you the number of units per month that covers it, plus how much headroom you have if sales come in under plan.

July 26, 2026How to Calculate VAT — Adding, Removing and Checking Your WorkThe two VAT calculations every business needs, why removing VAT is not subtracting the percentage, how input and output VAT actually settle, and how to check a figure in seconds.Finance7 min read

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Business Calculators

About business calculators

The one to start with

Profit Margin Calculator

What it does

All business calculators

What makes these business calculators worth using

Margin and markup, side by side

The formula is shown with the result

Solve in any direction

See the effect of a change immediately

Built on net figures

No spreadsheet to maintain

How these tools get used

Working out whether a promotion is affordable

Pricing backwards from a target

Finding the volume that covers fixed costs