What is a profit margin?

Profit margin is the percentage of revenue that exceeds the cost of goods sold. A 30% margin means for every $100 in sales, you keep $30 after direct costs. Gross margin excludes operating expenses; net margin includes everything.

What is the difference between margin and markup?

Margin is profit divided by selling price. Markup is profit divided by cost. A 50% markup equals only a 33.3% margin — not 50%. This is the most expensive pricing mistake small businesses make.

What is a good profit margin in 2026?

In 2026, a healthy gross margin depends heavily on your industry. Software: 60-80%. Retail: 20-50%. Restaurants: 3-9% net. E-commerce: factor in a 12% CAC buffer on top of product margins.

How do I calculate selling price from a desired margin?

Use: Selling Price = Cost / (1 - Desired Margin%). For a 40% margin on a $60 item: $60 / 0.60 = $100. Our calculator handles this automatically in the third input field.

Does this calculator store my financial data?

No. All calculations run locally in your browser using JavaScript. Your cost and revenue figures are never transmitted to or stored on our servers.

Profit Margin Calculator: Verify Your Pricing & Markup (2026)

Profit Margin Calculator

Calculate margin from cost & price — or find your selling price from a desired margin

Cost Price ($)

Selling Price ($)

— or calculate from desired margin —

Desired Margin (%)

Privacy First: All calculations run locally in your browser. Your financial data is never stored or transmitted.

💡 2026 Margin Intelligence — The 50% Markup Trap

Many business owners apply a 50% markup thinking they're hitting a 50% margin — but they're actually at only 33.3%. In the current high-input cost economy, a 25% gross margin is no longer a safe baseline for e-commerce. Factor in a 12% Customer Acquisition Cost (CAC) buffer. If your net margin is under 8%, your business is technically fragile to shipping rate spikes. Use our Net Margin Calculator to see your real number.

Last Verified: May 2026 | Verified by: TheMarginCalculator.com Research Team | Report a Data Error

📋 Editorial Team

Our team of financial analysts and business data researchers manually verify every margin formula and benchmark figure against primary sources including NYU Stern Damodaran datasets, IRS publications, and industry-specific financial reports. We audit and update all data quarterly. Found a discrepancy? Report a Data Error.

The Most Expensive Pricing Mistake in Small Business

What Is a Margin Calculator?

A margin calculator tells you exactly how much of your revenue you keep as profit after covering costs. Our suite calculates three things simultaneously — margin, markup, and gross profit.

📊

Profit Margin

Revenue-based. Answers: "What percent of my revenue do I keep?" A 40% margin means you keep $0.40 of every $1 in sales.

🏷️

Markup

Cost-based. Answers: "How much did I add to my cost?" A 40% markup on a $60 item = a 28.6% margin — not 40%.

💰

Gross Profit

The raw dollar amount you keep before operating expenses. Revenue minus COGS. The foundation of every pricing decision.

Margin = (Selling Price − Cost) ÷ Selling Price × 100
Markup = (Selling Price − Cost) ÷ Cost × 100
Key Rule: 50% Markup ≠ 50% Margin. It equals only 33.3%.

How to Use This Calculator

Enter your cost price — what you paid (COGS, labor, materials)
Enter your selling price — what the customer pays
Results appear instantly — margin %, markup %, gross profit, and margin quality
Or use the desired margin field to find the selling price you need
Hit Copy Results to paste into a spreadsheet or report

Markup → Margin Quick Reference

Stop converting in your head. Use this table — or use the calculator above.

Markup %	Equals Margin %	Health Signal	Common In
10%	9.1%	⚠️ Razor thin	Grocery, commodities
25%	20%	🟡 Watchable	Consumer goods, distribution
43%	30%	✅ Solid	Retail, manufacturing
67%	40%	✅ Healthy	Apparel, specialty retail
100%	50%	✅ Strong	Software, professional services
150%	60%	🟢 Excellent	SaaS, luxury goods
300%	75%	🟢 Premium	High-end software, IP licensing

Frequently Asked Questions

What is a good profit margin in 2026? +

It depends heavily on your industry. Software companies often see 60–80% gross margins. Retail typically targets 20–50%. Restaurants average 3–9% net. Grocery stores operate on 1–3%. In 2026, e-commerce businesses should also factor in a 12% Customer Acquisition Cost buffer on top of product margins — inflation in fulfillment costs has compressed what used to be "healthy" thresholds.
What is the difference between margin and markup? +

Margin is profit divided by selling price. Markup is profit divided by cost. They measure the same profit from two different angles. A 50% markup = a 33.3% margin. A 50% margin requires a 100% markup. Confusing them is one of the most expensive and common pricing mistakes small businesses make — and it's completely avoidable with this calculator.
How do I calculate selling price from a desired margin? +

Use the formula: Selling Price = Cost ÷ (1 − Margin%). For a 40% margin on a $60 item: $60 ÷ 0.60 = $100. Our calculator handles this automatically — enter your cost and desired margin percentage in the third field and your required selling price appears instantly.
What is gross margin vs net margin? +

Gross margin only deducts the direct cost of goods sold (COGS) from revenue. Net margin deducts everything — COGS, operating expenses, marketing, salaries, interest, and taxes. Net margin is always lower than gross margin. Investors look at both: gross margin shows production efficiency; net margin shows overall profitability. Use our Net Margin Calculator for the full picture.
Does this calculator store my financial data? +

No. Every calculation runs locally in your browser using JavaScript. Your cost figures, revenue, and margin data are never transmitted to or stored on our servers. We built it this way intentionally — business owners should never have to worry about their pricing strategy being logged.
Can I use this for service businesses and freelancers? +

Absolutely. For service businesses, your "cost" is your direct labor cost (hours × internal hourly rate) plus any direct materials or tools. Your "selling price" is what the client pays. The margin result shows exactly how efficiently your service delivery converts revenue into profit — which is the same core question whether you sell products or hours.

Stop Guessing Your Profits.