Profit Margin Calculator
Enter your cost and selling price to instantly see profit, net margin, and markup — perfect for pricing products and planning discounts.
Profit
$20
Net margin
20%
Markup
25%
Formulas
Profit = Selling price − Cost = 100 − 80
Net margin = Profit ÷ Selling price = 20%
Markup = Profit ÷ Cost = 25%
Margin vs markup
Margin is profit as a percentage of the selling price you receive. Markup is profit as a percentage of what you paid. For a product bought for $80 and sold for $100, margin is 20% but markup is 25%.
Need GST-ready invoices?
Once you've set your price, create professional tax-ready invoices with Digital Invoice — track customers, payments, and GST in one place.
Frequently asked questions
Is margin the same as markup?
No. Margin divides profit by the selling price; markup divides profit by the cost. Margin is always smaller than markup for the same sale because the selling price is larger than cost.
How do I add a margin to a cost?
To hit a target margin, divide the cost by (1 minus the margin), e.g. to keep 30% on a $80 cost, sell at $80 ÷ 0.7 ≈ $114.29.
Why is my margin negative?
A negative margin means the selling price is below cost — you're selling at a loss. Check your cost includes materials, labor, shipping, and platform fees.
Related tools
More from Finance & Calculators
Need professional Digital Invoices?
Create branded, tax-ready invoices in seconds with our Digital Invoice product.