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Margin & markup calculator

Profit Margin Calculator

Enter your revenue and cost, or a price and unit cost, to get gross profit, gross margin, markup and net margin in one place. Works in any currency, with margin vs markup explained. Free, no signup.

Margin, markup & netAny currencySee the working
Total sales before any costs
$
Direct cost of what you sold: stock, materials, production
$
Overheads to include for net profit: rent, software, wages, fees
$
Margin and markup use the same $400.00 of gross profit, but divide it by different numbers. Margin divides by revenue, markup divides by cost.
Gross profit margin
40%
You keep $400.00 of gross profit on $1,000.00 of revenue.
Gross profit
$400.00
Revenue minus cost of goods
Gross margin
40%
Gross profit ÷ revenue
Markup
66.7%
Gross profit ÷ cost
Net margin
40%
Net profit ÷ revenue
Net profit (no overheads entered)
$400.00
Add operating costs on the left to turn gross profit into net profit. With no overheads, net profit equals gross profit.
The working
Gross profit = $1,000.00 − $600.00$400.00
Gross margin = $400.00 ÷ $1,000.00 × 10040%
Markup = $400.00 ÷ $600.00 × 10066.7%
Net margin = $400.00 ÷ $1,000.00 × 10040%
Figures update as you type. A guide, not financial advice.
Simon Chadwick
Simon Chadwick
Founder, Orbit Money
Method: standard gross margin, markup and net profit formulasUpdated: 16 July 2026Sources: Investopedia: profit margin, Corporate Finance Institute: margin vs markup

Gross profit, margin, markup and net profit in one place

This calculator gives you the four numbers people usually need at once. From a revenue and a cost it works out your gross profit, your gross margin, your markup, and, once you add overheads, your net profit and net margin. You can enter totals for a period or a single item’s price and unit cost, whichever you have to hand.

How to calculate gross profit margin

Gross profit is revenue minus the cost of goods sold. Gross margin turns that into a percentage of revenue:

Gross profit = Revenue − Cost of goods sold
Gross margin % = (Gross profit ÷ Revenue) × 100
Markup % = (Gross profit ÷ Cost) × 100
Net profit = Revenue − COGS − Operating costs
Net margin % = (Net profit ÷ Revenue) × 100

Take 1,000 of revenue and 600 of cost. Gross profit is 400. Divide 400 by the 1,000 of revenue and you get a 40% gross margin. Divide the same 400 by the 600 of cost and you get a 66.7% markup. Same deal, two very different-looking percentages, which is exactly why margin and markup get confused.

Margin vs markup: the difference that trips people up

Margin and markup both start from the same gross profit. The difference is what you divide it by. Margin divides profit by the selling price, so it is always less than 100% and answers “what share of the sale do I keep?” Markup divides profit by the cost, can go well above 100%, and answers “how much did I add on top of what it cost me?” Quote a markup when you are pricing up from cost, and a margin when you are looking at profitability. Mixing them up is a common way to underprice: a 50% markup is only a 33.3% margin, not a 50% margin.

Gross margin vs net margin

Gross margin only counts the direct cost of what you sold. Net margin counts everything else too: rent, wages, software, marketing, fees and tax before tax. A healthy gross margin can still turn into a net loss once those overheads are in. Enter your operating costs in the calculator to see both, so you know whether the problem is your pricing or your running costs.

Markup calculator

Used as a markup calculator, this tool answers “how much do I add on top of cost?” Markup is gross profit divided by cost, so it is always measured against what the item cost you, not the sale price. Buy stock for 40 and sell it for 100 and the gross profit is 60, which is a 150% markup on the 40 cost. Enter your unit cost and price above and the markup appears next to the margin, so you can price up from cost and check the profitability in the same view.

Net profit calculator

Add your operating costs and the tool works as a net profit calculator too. Net profit is revenue minus the cost of goods sold minus overheads such as rent, wages, software, marketing and fees. On 1,000 of revenue with 600 of cost and 250 of overheads, gross profit is 400 but net profit is 150, a 15% net margin. Seeing gross and net side by side tells you whether a thin bottom line comes from your pricing or your running costs.

How to use this calculator

  1. Pick your currency, then choose whether to enter period totals or a single item's price and unit cost.
  2. Enter your revenue and cost of goods. Gross profit, margin and markup appear straight away.
  3. Add operating costs or overheads to see your net profit and net margin.
  4. Use the working panel to check each formula, and compare margin against markup side by side.

Frequently asked questions

How do you calculate profit margin?
Gross profit margin is gross profit divided by revenue, times 100. First take revenue and subtract your cost of goods sold to get gross profit. Then divide that gross profit by revenue and multiply by 100 to turn it into a percentage. For example, on 1,000 of revenue with 600 of costs, gross profit is 400, and 400 divided by 1,000 is 0.4, so the margin is 40%. The calculator above does this the moment you type in the two figures.
What is the difference between margin and markup?
Margin and markup are built from the same gross profit, but they divide it by different numbers, which is why people mix them up. Margin is gross profit divided by revenue, so it tells you what share of each sale you keep. Markup is gross profit divided by cost, so it tells you how much you added on top of what the item cost you. On a 40 item that sells for 100, gross profit is 60. That is a 60% margin (60 of the 100 sale) but a 150% markup (60 added on top of the 40 cost). The same deal looks very different depending on which one you quote.
What does a 30% profit margin mean?
A 30% gross profit margin means that for every 100 of revenue, 30 is left as gross profit after the direct cost of what you sold, and 70 went on those costs. It is a share of the sale, not a share of the cost. A 30% margin is not the same as a 30% markup: a 30% margin works out to roughly a 42.9% markup, because the profit is measured against the smaller cost figure rather than the larger sale figure.
How do I convert markup to margin?
To turn a markup into a margin, divide the markup by one plus the markup. A 50% markup becomes 0.5 divided by 1.5, which is 0.333, or a 33.3% margin. To go the other way and turn a margin into a markup, divide the margin by one minus the margin: a 40% margin is 0.4 divided by 0.6, which is 66.7% markup. You do not have to do this by hand. Enter your price and cost above and the calculator shows the margin and the markup side by side.
What is a good profit margin?
It depends heavily on the industry, so treat rules of thumb with care. A common benchmark is that a net profit margin around 10% is healthy, 20% is strong and 5% is thin, but software businesses often run far higher while grocery and hospitality run much lower. Gross margins vary even more by sector. The useful move is to track your own margin over time and against direct competitors rather than a single universal number.
What is the difference between gross profit and net profit?
Gross profit is revenue minus the direct cost of goods sold, so it only counts what the product itself cost you. Net profit goes further and also subtracts operating costs such as rent, wages, software, marketing and fees, so it is what reaches the bottom line. A business can have a strong gross margin and still make a net loss once overheads are counted. Add your operating costs in the calculator to see gross profit and net profit next to each other.

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Simon Chadwick
About the author
Simon Chadwick
Founder of Orbit Money

Simon is the founder of Orbit Money, a tool that helps people track subscriptions and recurring spend. He builds Orbit's free money calculators and writes about personal finance and running a business for readers in the UK, Australia and beyond.

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This tool is a guide, not financial advice.