PROFIT MARGIN &
MARKUP CALCULATOR.
Are you pricing your products and services correctly?
Find out how much profit you're making on every sale and what percentage you're actually keeping.
Calculate gross profit, profit margin, markup percentage, monthly gross profit and the selling price needed to reach your target margin.
HOW MUCH PROFIT
DO YOU MAKE PER SALE?
Enter what your product or service costs you and how much you sell it for.
The calculator instantly works out gross profit, profit margin, markup and estimated monthly earnings before overheads.
Results use your entered selling price, direct cost and additional fees. Markup is calculated using total direct cost as the base. If total direct cost is zero, markup is undefined. Annual figures assume 12 identical months. Calculations are before tax, VAT adjustments and unentered expenses.
Profit divided by selling price.
Shows what percentage of revenue remains after direct costs.
Profit divided by direct cost.
Shows how much profit has been added relative to the cost.
WORK OUT WHAT
YOU SHOULD CHARGE.
Want to achieve a specific markup rather than a target profit margin?
Enter your desired markup percentage below to calculate a selling price using the direct cost entered above.
Based on your total direct cost per sale.
WHAT'S THE DIFFERENCE BETWEEN
PROFIT MARGIN AND MARKUP?
Profit margin and markup both help businesses evaluate pricing, but they measure profit differently.
01. Gross Profit
Gross profit is selling price minus the direct costs included in your calculation.
02. Profit Margin
Profit margin is gross profit divided by selling price, multiplied by 100.
03. Markup
Markup is gross profit divided by direct cost, multiplied by 100.
Example: A Product That Costs £40 and Sells for £100
Imagine you buy a product for £40, pay £5 in additional selling fees and sell it for £100.
Total direct cost is £45.
Gross profit per sale is £55.
Your profit margin is 55%.
Your markup on direct cost is approximately 122.22%.
If you sell 100 units per month, you would generate £10,000 in sales revenue and £5,500 gross profit before overheads and tax.
HOW TO IMPROVE
YOUR PROFIT MARGINS.
Improving profitability is not always about increasing sales. Your pricing and cost structure also matter.
Review Supplier Costs
Compare suppliers and look for opportunities to reduce product and material costs without compromising quality.
Review Your Prices
Check whether your prices reflect the value delivered and cover your business expenses.
Include Hidden Fees
Remember payment processing, commissions, packaging, shipping and other direct selling expenses.
Understand Your Sales Mix
Different products and services may produce different margins. Review which sales contribute most to profit.
Improve Delivery Efficiency
Better processes, automation and efficient operations may reduce the cost of delivering each sale.
Monitor Profit Regularly
Recalculate margins when supplier prices, wages, commissions or other costs change.
PROFIT MARGIN & MARKUP FAQS.
What is the difference between margin and markup?
Margin measures profit as a percentage of selling price. Markup measures profit as a percentage of cost.
How do I calculate profit margin?
Subtract direct costs from selling price, divide the result by selling price and multiply by 100.
How do I calculate markup?
Subtract direct cost from selling price, divide the profit by direct cost and multiply by 100.
Is 50% markup the same as 50% margin?
No. A 50% markup produces a margin of approximately 33.33% when cost is positive.
How do I calculate a selling price for a 40% margin?
Divide total direct cost by 0.60. For example, a £60 direct cost requires a £100 selling price to achieve a 40% margin.
Does gross profit include rent and wages?
This calculator deducts only the direct costs and selling fees you enter. Other expenses, including rent and fixed salaries, must be considered separately.
Can I use this for services instead of products?
Yes. Enter the selling price of a service and the direct cost of delivering that service.
Is this profit margin calculator free?
Yes. It is completely free to use with no registration or payment required.
SELLING MORE IS GOOD.
KEEPING MORE PROFIT IS BETTER.
Understanding your profit margins is an important part of building a sustainable business.
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