How it works
Margin uses sales revenue as its denominator. Markup instead uses cost. This tool excludes overheads and tax.
FormulaGross margin = (selling price − cost) ÷ selling price × 100.
MONEY & BUSINESS / BUSINESS PRICING
← All toolsProfit margin & markup
Distinguish profit margin from markup so pricing decisions are easier.
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YOUR RESULT
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Profit margin & markup: a worked example
With selling price 100, cost of goods 65, the gross margin is 35%.
| Selling price | 100 |
|---|---|
| Cost of goods | 65 |
| Gross margin | 35% |
|---|---|
| Gross profit per sale | $35.00 |
| Markup on cost | 53.85% |
Amounts are shown in US dollars for illustration. Choose your own currency in the calculator above; it labels amounts and does not convert them.
Make the numbers useful
Try changing one input at a time. The live result helps you see which assumption has the greatest effect.
Use Save scenario A, change an input, and compare both results side-by-side. You can also share your settings using a link.
Modelled results are estimates. Independently check decisions involving health, finances or safety.
Frequently asked questions
How is the profit margin & markup calculated?
Gross margin = (selling price − cost) ÷ selling price × 100. Margin uses sales revenue as its denominator. Markup instead uses cost. This tool excludes overheads and tax.
What does the profit margin & markup example show?
With selling price 100, cost of goods 65, the gross margin is 35%. Gross profit per sale: $35.00; Markup on cost: 53.85%.
What assumptions and limits apply?
This is an estimate based on the inputs and assumptions shown on this page, not professional advice. Check anything with financial, health or safety consequences independently.
Is my data private?
Yes. Calculations run in your browser and your numbers are not sent to a server. A share link contains the inputs you choose to share, so check it before sending it to anyone.
Can I use my own currency?
Yes. Pick from 33 currencies and the amounts are labelled to match. The selector does not convert between currencies, so enter prices in your own currency.