Free Margin Calculator
Profit margin, markup, and selling price from cost and revenue.
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Result
Gross margin
50.00%
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Short answer
Gross margin is profit divided by revenue. Markup is profit divided by cost. They are different — a 50% markup is a 33% margin.
What is the Margin Calculator?
Profit expressed as a percentage. Margin (of revenue) and markup (of cost) are the two conventions.
How does the Margin Calculator work?
Subtract cost from revenue to get profit. Divide by revenue for margin, or by cost for markup.
Formula
Variables
costCost of goods soldrevenueSelling price
Explanation
Margin uses revenue as the base; markup uses cost. Most business decisions reference gross margin.
Examples
Example 1: Cost $50, sells at $100
Profit $50, margin 50%, markup 100%.
Applications
- Retail pricing
- SaaS gross-margin reporting
- Wholesale-to-retail conversion
Advantages
- Compares products of any size on a normalized basis
Limitations
- Gross margin — ignores overhead, sales, marketing
Common mistakes
- Using markup and margin interchangeably in pricing decisions
Tips
- Software companies typically target 70–85% gross margins; retail 20–50%
Related concepts
The Margin Calculator sits inside the Finance Calculators hub, in the business & accounting cluster. Unit economics, margins and company metrics. Understanding the terms below makes the output easier to interpret and easier to compare against neighbouring measures.
Practical use cases and industry applications
Understanding Margin
Profit expressed as a percentage. Margin (of revenue) and markup (of cost) are the two conventions. Within finance calculators, margin belongs to the business & accounting cluster, where it shares terminology and assumptions with closely related tools.
Learning how margin is calculated
Margin uses revenue as the base; markup uses cost. Most business decisions reference gross margin. Working through the variables one at a time — cost, revenue — makes the result reproducible by hand and easier to sanity-check.
Using margin to make a decision
Retail pricing SaaS gross-margin reporting Wholesale-to-retail conversion Because outputs depend on the assumptions you enter, run more than one scenario before committing to a figure.
How margin compares with related measures
contribution margin, fixed cost, variable cost, runway all describe adjacent aspects of business & accounting. Comparing this calculator's output against those measures — using the related tools listed on this page — prevents a single metric from being read in isolation.
Frequently asked questions
Margin vs markup — which is bigger?
Markup is always the bigger number for the same product, because it divides by the smaller cost figure.
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