CalculatorMargin
Calculate your profit margin percentage from cost and selling price to understand how much of every sale you actually keep as profit. Margin is one of the most important business metrics — it drives pricing decisions, product selection, and profitability analysis. This tool is used by business owners, product managers, freelancers, and retailers who need a quick, accurate margin figure without spreadsheet formulas.
Use Margin Tool in Seconds
Margin Calculator
Interactive calculator engine
Margin is based on selling price: (selling price - cost) / selling price × 100.
How To Use Margin Calculator
- Enter your cost — the amount you pay to produce, purchase, or deliver the product or service.
- Enter the selling price — the amount you charge customers.
- The tool calculates margin as (Selling Price − Cost) ÷ Selling Price × 100.
- Review both the margin percentage and the absolute profit amount per unit.
- Adjust pricing or cost inputs to model how changes impact margin in real time.
Frequently Asked Questions
What is profit margin?
Profit margin is the percentage of the selling price that remains after the cost is subtracted. The formula is: Margin = (Selling Price − Cost) ÷ Selling Price × 100. For example, if you sell a product for $50 and it costs $30 to produce, the margin is ($50 − $30) ÷ $50 × 100 = 40%. This means 40% of the selling price is profit.
Is margin the same as markup?
No, and confusing the two is a common business error. Margin is calculated relative to the selling price, while markup is calculated relative to cost. A 50% markup does not equal a 50% margin — a $10 cost with 50% markup gives a $15 price and a 33% margin. A 50% margin on a $15 price means the cost is $7.50. Use the Markup Calculator on this site for markup-based pricing calculations.
What is a healthy profit margin for a business?
Healthy margins vary widely by industry. Retail clothing and grocery typically operate at 5–15% net margin. Software products often achieve 20–40%. Service businesses commonly target 15–30%. Food service businesses often operate below 10%. Compare your margin against industry benchmarks rather than a universal standard, and track margin trends over time to spot improvements or emerging cost pressures.
How do I use margin to set a selling price?
To set a price based on a target margin, rearrange the formula: Selling Price = Cost ÷ (1 − Target Margin). For a product costing $40 and a 35% target margin: Selling Price = $40 ÷ (1 − 0.35) = $40 ÷ 0.65 = $61.54. This ensures the selling price delivers exactly your desired margin percentage.
Can this tool be used for services as well as products?
Yes. For service businesses, enter your cost of delivery (hourly labor rate, overhead allocation, direct expenses) as the cost and your service fee as the selling price. The margin percentage works identically whether you are pricing a physical product or a service. Many service businesses target higher margins than product businesses because the incremental cost of delivering an additional unit is often lower.
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