Margin & Markup Calculator
Price your products so you actually make money. Enter cost and selling price to see profit per unit, margin, and markup — and understand the difference between the two.
How to use this calculator
- Enter cost per unit.
- Enter selling price.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
Profit is price minus cost. Margin divides profit by price; markup divides profit by cost. Worked example: cost $60, price $100 → $40 profit, 40% margin, 66.7% markup. The two percentages are different because they divide by different bases.
Frequently asked questions
What margin should a small business aim for?
It varies by industry: grocery stores run on 1–3% net margins, restaurants 3–5%, software 20%+, and consulting often 50%+. The right target depends on your fixed costs and how much volume you sell.
How do I set a price to hit a target margin?
Divide cost by (1 − desired margin). To make a 40% margin on a $60 cost, price = 60 ÷ 0.60 = $100. Do not use markup for this — a 40% markup gives only a 28.6% margin.
Margin vs markup — what is the difference?
Margin is profit as a share of the selling price; markup is profit as a share of cost. A 50% markup (cost + half) yields a 33.3% margin — the numbers are equal only at 100%.
What about overhead and fixed costs?
This calculator covers per-unit gross margin. To know net margin, subtract fixed costs (rent, salaries, software) from total gross profit before dividing by revenue.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.