Profit Margin Calculator
Analyze your profit margin from cost and revenue, or find the selling price needed to hit a target margin. Understand the difference between margin and markup.
Cost & Revenue
Profit Analysis
Cost500
Revenue800
Profit300
Profit Margin37.5%
Markup60%
Margin vs markup — what's the difference?
Profit margin is profit expressed as a percentage of revenue: Margin % = (Revenue − Cost) ÷ Revenue × 100. Markup is profit expressed as a percentage of cost: Markup % = (Revenue − Cost) ÷ Cost × 100. These are different — a 30% margin is not the same as a 30% markup.
To price a product for a target margin, use Price = Cost ÷ (1 − Margin % ÷ 100). For example, to achieve a 30% margin on a $500 cost, the selling price should be $500 ÷ 0.70 = $714.29, giving a $214.29 profit.
Healthy margin benchmarks
- Retail — 20% to 50% gross margin
- Software / SaaS — 70% to 90% gross margin
- Restaurants — 60% to 70% food cost (30-40% margin)
- Consulting / services — 50% to 70% margin
- Manufacturing — 25% to 40% gross margin
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