How to Calculate Profit Margin

Profit margin tells you what percentage of revenue remains after costs. It is one of the most important numbers for pricing products and services.

## The formula

**Profit margin (%) = (Revenue − Cost) ÷ Revenue × 100**

For example, if you sell something for $100 and it costs $60 to deliver, your profit is $40 and your margin is 40%.

## Margin vs markup

Markup is profit as a percentage of **cost**, not revenue. A 50% markup on $60 cost equals $90 revenue — which is only a 33.3% margin.

Use the Profit Margin Calculator to compute both instantly, including reverse calculations when you know your target margin.

## When to use each

- **Margin** — compare profitability across products with different price points. - **Markup** — set prices from known costs in retail and wholesale.

Try the calculator with your own numbers — all processing happens in your browser.