Profit Margin Calculator
Margin tells you how much of a selling price remains after the costs you include. It is useful for comparing prices, provided you compare the same cost basis.
Your calculation
Free toolUse one currency and a consistent tax basis. No currency conversion.
Results include only the costs and assumptions entered.
How to use this calculator
Enter your values in one currency. The result updates as you type. Check the fee and tax assumptions before using it for a pricing decision, then download a PDF if you want a record.
How the result is calculated
Margin = (price − cost) ÷ price × 100. Markup uses cost as its denominator. Neither metric includes expenses you leave out.
Worked example
£20 price and £12 cost gives £8 profit, 40% margin and 66.67% markup.
What should I include in my costs?
Include the costs that change with the item or order: materials, purchasing, making time, packaging, fulfilment and applicable fees. Allocate wider overhead separately. An omitted cost will make the estimate look better than it should.
Does this calculate my tax liability?
No. Entered tax treatment is an assumption for this calculation. The tool does not determine VAT registration, sales-tax nexus, tax rates by location or business income taxes. Check unusual situations with a qualified adviser.
Can I use USD?
Yes. Choosing US inputs uses dollars without converting amounts. Country-specific presets only apply where explicitly stated. Changing a symbol does not establish a platform fee or tax rule.
Questions about this calculation
How is profit margin calculated?
Subtract included cost from selling price, then divide that amount by selling price and multiply by 100. At £20 price and £12 included cost, the result is £8 and 40%. The meaning depends on which costs you include.
What is the markup on that same order?
Markup divides the £8 by the £12 cost rather than the £20 price, giving 66.67%. It is a different measure. Neither figure includes costs omitted from the input.