Free Profit Margin & Markup Calculator

Profit margin is the share of a selling price that remains after the cost is covered. If a product sells for ₹100 and costs ₹80, the profit is ₹20. The profit margin is 20%, because ₹20 is one fifth of the ₹100 price.

The rupee amount and the percentage answer different questions. Profit, which this calculator also shows as Difference, is the gap between the selling price and the cost price. The margin percentage tells you how much of every rupee you charge is that gap. A higher margin means more of the price is profit. A margin of zero means you are selling at cost. A negative margin means the price is below the cost and the sale loses money.

Margin is always measured against the selling price. That is why a real product, one that has a cost, cannot have a margin of 100%. The entire price would have to be profit, which leaves nothing for what you paid.

Markup is the same profit, measured against the cost price instead of the selling price. On an ₹80 cost, a ₹20 profit is a 25% markup. You added a quarter of the cost on top of what you paid, and the selling price became ₹100.

Many price lists start from markup because the cost is the number on the invoice. A rule such as "add 25% to cost" is easy to apply before anyone has agreed a shelf price. The selling price is then the cost plus the markup amount.

Markup can pass 100%. A dish that costs ₹90 in ingredients and sells for ₹240 earns more profit than the food cost, so the markup is well above 100%. That is ordinary where the price also has to carry labour, rent and waste. Unlike margin, markup has no ceiling at 100%.

Profit margin and markup describe one profit from two directions. Margin asks what share of the price you charge is profit. Markup asks how much you added on top of what you paid. They are not two names for the same percentage.

A 25% markup is not a 25% margin. On an ₹80 cost, a 25% markup gives a ₹100 selling price and a 20% margin. If you wanted a 25% margin and only marked the cost up by 25%, you underpriced the product. If you applied a 25% margin by mistake while thinking you were marking up, the selling price rises to ₹106.67.

The gap widens as the percentage grows. A 50% margin needs a 100% markup. A 50% markup is only a 33.33% margin. A cost-plus price list and a margin target in a plan will not show the same number, and they are not supposed to.

Profit margin % = (profit ÷ selling price) × 100.

Profit is the selling price minus the cost price, so the same formula can be written as (selling price − cost price) ÷ selling price × 100. With a selling price of ₹100 and a cost of ₹80, profit is ₹20. Divide 20 by 100 and multiply by 100. The margin is 20%.

If you already know both prices, enter the cost and the selling price. The margin and markup modes return the profit, the margin and the markup, rounded to two decimal places. A margin of 100% or more is not usable when the product has a cost: the selling-price mode rejects it, because the formula would divide by zero or by a negative number.

Markup % = (profit ÷ cost price) × 100.

Profit is still the selling price minus the cost price. The change from the margin formula is the number you divide by: cost, not selling price. Cost ₹80, selling price ₹100, profit ₹20. Divide 20 by 80 and multiply by 100. The markup is 25%.

You can also build a price from a markup: selling price = cost × (1 + markup ÷ 100). A 25% markup on ₹80 is ₹80 × 1.25 = ₹100. This page's selling-price mode starts from a margin. If your rule is a markup, enter the cost and a trial selling price and change the price until the markup matches.

Selling price = cost price ÷ (1 − profit margin ÷ 100).

Decide the margin you want to keep, then work back from the cost. For a 20% margin, subtract 0.20 from 1, which leaves 0.80. Divide the cost by 0.80. An ₹80 cost becomes a ₹100 selling price, and the profit is ₹20.

The steps do not change for a larger cost. Write the margin as a share of 1, subtract it from 1, and divide the cost by what remains. A 30% margin means you divide by 0.70. A cost of ₹400 then has a selling price of ₹571.43 after rounding to two decimal places. The profit is ₹171.43. The markup is 42.86%, higher than 30%, because markup is measured on the cost.

Decimals are allowed, and the margin must stay below 100. A margin of zero returns a selling price equal to the cost and a profit of zero, which is the break-even price before you add anything for the business.

A margin target is one way to set a price. It works best when you know which costs the percentage is supposed to cover, and when you are willing to compare the result with what buyers will actually pay.

Cost-plus pricing starts from the invoice and adds a markup. It suits a long list and a simple rule, such as one markup for fast lines and a higher markup for slow ones. A tidy markup on a product nobody wants is still stock on the shelf.

Target-margin pricing starts from the percentage you need and calculates the selling price. That is what the selling-price mode does. If the result sits far above nearby prices, the target may be too high, or the cost may be too high.

Value pricing starts from what the customer receives. A repair that saves a machine, or a meal people treat as an occasion, can hold a higher margin than a commodity with a similar cost. You should still know the margin you are earning. A good, better and best range can put a thinner margin on the entry price if the middle option is the one most people buy. Competitive pricing should copy a nearby price only after you check the margin. If matching that price cannot cover the costs outside the product, buy better, change what you sell, or leave the comparison.

Margin connects a single price to the money the business keeps. Sales can rise while profit falls if more is sold at a weaker margin.

Margin also shows which discounts you can afford. A 10% discount on a 20% margin does not leave 10%. On a ₹100 price with ₹20 of profit, ₹10 off leaves ₹10 of profit and an 11.11% margin. When a supplier adds to the cost and the shelf price stays the same, the margin falls even though the product looks unchanged.

Product margin is not the profit of the company. Rent, wages and tax still have to be paid from what the margin leaves. A sound margin on the item is the start of that sum, not the end of it.

The mistake that causes the most wrong prices is treating margin and markup as the same percentage. They meet only at zero. Everywhere else, markup is the larger number. A price built on the wrong one will not hit the margin you thought you set.

A second mistake is leaving freight, packaging, wastage, card fees or direct labour out of the cost. A margin on the bare purchase price overstates what you keep. A discount is a third mistake if you do not recalculate: take the new selling price, subtract the cost, and divide that profit by the new price.

Copying a competitor's price without the formula hides a poor buy. Matching a price is reasonable when the margin still works. A margin of 100% or more cannot be turned into a selling price from a real cost. And leaving last year's price in place after the cost has moved is quiet and expensive: on a thin margin, a small cost increase removes a large part of the profit.

The calculator keeps the two percentages apart. Start from a cost and a margin and you get the selling price and the profit. Start from a cost and a selling price and you get the profit, the margin and the markup. You do not have to remember which figure divides by the cost and which divides by the price.

Decimals are accepted, and each result is rounded to two decimal places. The difference beside the profit is the rupee gap between selling price and cost, so the amount and the percentages can be read together.

It runs in the browser, with nothing to install and no account to open. Results can be copied, printed or shared. It will not replace your books. It will keep a 20% margin from being treated as a 25% markup, and it updates when a cost or a discount changes.

Use it if you set a price from a cost. A retailer checking a tag, a wholesaler applying a standard markup, a manufacturer quoting a unit, a restaurant costing a dish, and a small business writing a quote are all doing the same three sums: profit, margin and markup.

It also helps an owner revising a price list after a supplier increase, and anyone who has a margin target and needs the selling price that target implies. Change the cost or the discount and read the margin again before you agree.