Margin Calculator
Calculate gross margin and markup from cost and selling price.
Try an example
40%
About this calculator
How This Margin Calculator Works
Enter a cost and a selling price, and the calculator returns the gross margin, the markup, and the profit per unit.
Worked Example
A product costing $60 sold for $100 has a gross margin of 40% and a markup of 66.67% — the same $40 profit, expressed relative to two different bases.
The Formulas
Margin = (Price − Cost) ÷ Price — profit as a share of the selling price. Markup = (Price − Cost) ÷ Cost — profit as a share of the cost. Markup is always the larger number for the same sale, because it's measured against a smaller base (cost is always less than price when there's a profit).
A Common Pricing Mistake
Applying a markup percentage when you actually meant to target a margin percentage — or vice versa — produces a different price than intended. For example, a 50% markup on a $60 cost gives $90 (a 33.3% margin), not a 50% margin — to hit a 50% margin on that same cost, the price would need to be $120 instead. Being clear about which metric you're targeting avoids under- or over-pricing.
Worked example
A product costing $60 sold for $100 has a gross margin of 40% and a markup of 66.67% — the same $40 profit expressed as a percentage of two different bases.
Frequently asked questions
What's 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. They describe the same dollar profit differently, and markup is always higher than margin for the same numbers (except at 0%).
Which one should I use to price a product?
Markup is usually easier to apply when pricing from cost ("add 50% markup to cost"), while margin is more useful for comparing profitability across products or against a target margin goal.
Does this account for all business costs?
No — this uses a single cost figure you provide. For a full profitability picture, make sure that cost includes everything relevant (materials, labor, overhead), not just the wholesale or unit cost.