Tool workspace
Your cost per item or service.
Customer-facing price.
Shows the selling price required for this gross margin.
Profit Margin Calculator
Calculate profit, margin, and markup from cost and selling price, or solve for a selling price from a target margin. The page distinguishes margin from markup because confusing them changes pricing decisions.
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What this tool is for
Calculate profit, margin, and markup from cost and selling price, or solve for a selling price from a target margin. The page distinguishes margin from markup because confusing them changes pricing decisions.
How to use
- Enter unit cost and selling price for an existing offer.
- Review profit, margin on revenue, and markup on cost.
- For planning, enter a target margin and inspect the required selling price before taxes and fees.
Example
A cost of 60 and selling price of 100 yields 40 profit, 40% margin, and about 66.67% markup.
FAQ
Are margin and markup the same?
No. Margin divides profit by selling price; markup divides profit by cost.
Does this calculate net business profit?
No. It is a unit pricing calculation without overhead and tax.
Reproducible examples
Known inputs and expected results
Run these examples in the workspace above and compare the result with the documented output.
Profit, margin, and markup
- Input
- Cost 60; selling price 100
- Options
- Use the direct cost/price mode.
- Action
- Calculate all three values.
- Expected output
- Profit 40, margin 40%, markup 66.67%.
- Explanation
- Margin divides profit by selling price, while markup divides the same profit by cost.
Loss-making sale
- Input
- Cost 120; selling price 100
- Options
- Use the direct cost/price mode.
- Action
- Calculate and keep negative signs.
- Expected output
- Profit -20, margin -20%, markup about -16.67%.
- Explanation
- Selling below cost produces a negative amount and negative ratios rather than a zeroed result.
Error or unsupported case
Zero denominator
- Input
- Selling price 0
- Expected error or limit
- The calculation is rejected with: Selling price must be greater than 0. A separate cost-0 case can calculate margin but reports markup as unavailable.
- Safer alternative
- Use a meaningful non-zero selling price and treat a zero-cost item separately.
When not to use this tool
- Net profit or financial statements
- Calculations that must include tax, returns, labor, platform fees, or overhead
Algorithm and assumptions
profit=price−cost, margin=profit/price, markup=profit/cost; undefined zero-denominator ratios remain explicit and percentages are rounded for display.
Input and output
Inputs are cost, selling price, or target margin. Output separates amount, margin percentage, markup percentage, and required price.
Supported formats and behavior
- Margin and markup comparison
- Target-margin selling price
- Decimal costs and prices
Limits
- No tax, platform fees, returns, or overhead allocation
- A target margin must be below 100%
Edge cases and common errors
- Zero cost makes markup undefined
- Selling below cost produces negative profit
- Rounding can affect retail price points
Release testing
Checks cover known margin/markup vectors, loss cases, zero cost, target-price solving, invalid input, and reset.
Privacy boundary
The input and result stay in this browser session. ZZP Box does not upload or store the values entered in this tool.
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