01
Formula
Markup = profit ÷ cost. Margin = profit ÷ price.
Price from markup = cost × (1 + markup ÷ 100). Price from margin = cost ÷ (1 − margin ÷ 100). Reverse mode reports both percents from the cost and the selling price you enter.
Apply for financingProfit margin calculator
Profit margin calculator and markup calculator
This profit margin calculator shows the difference between margin and markup. Use the markup calculator mode to price from a percent on cost, the margin mode to price from a percent of the selling price, or the reverse mode to read both from a cost and a price.
Selling price
$100.00
Profit$20.00
Profit margin20.00%
Pricing math only. It is not accounting, tax, or financing advice, and it does not include overhead you leave out of the cost.
How it works
Margin is on the price. Markup is on the cost.
Profit is selling price minus cost. Markup percent is profit divided by cost. Margin percent is profit divided by selling price. A 25% markup on an $80 cost is a $100 price, and that same price is a 20% margin. They are not interchangeable percents. Pricing from a margin uses price = cost ÷ (1 − margin). Pricing from a markup uses price = cost × (1 + markup). A 100% margin is impossible because it would require a zero cost share. Overhead you leave out of the cost is not in the profit.
02
Example
An $80 cost and a 25% markup.
The selling price is $100.00. Profit is $20.00. The margin on that price is 20.00%. Switch to margin mode, enter 20% on the same $80 cost, and you land on the same $100 price. That is the point of keeping the two words apart.
03
Tips
Put overhead in the cost or accept that it is missing.
A job cost that ignores labor, fuel, and equipment payments overstates the margin. This page will not invent those. If a machine payment is part of the job, include it in the cost before you read the margin. It is still not tax or accounting advice.
04
Equipment
The margin has to cover the machine.
Equipment ROI on the financing tools page compares a machine's benefit with a payment. Dengaro arranges equipment financing from $15,000 to $2 million. A healthy markup on one job is not an approval.
Important questions
Know what to expect.
Why is a markup calculator different from a profit margin calculator?+
Markup divides the profit by the cost. Margin divides the profit by the selling price. The same dollars produce a higher markup percent than margin percent. This page calculates both so the labels stay straight.
What price does a 20% margin need?+
Price = cost ÷ 0.80. On an $80 cost, a 20% margin is $100. A 20% markup on $80 is only $96, because 20% of the cost is $16.
Can the margin be 100%?+
No. A 100% margin would mean the cost was zero. The margin field stops below 100 so the formula does not divide by zero.
Does this include tax?+
No. It is price arithmetic. It is not tax advice, and it does not compute income tax, sales tax, or a financing payment.
Financing built into the sale