Free business calculator
Profit Margin Calculator
Understand profit per unit, compare margin with markup and find a target selling price.
Illustrative starting figures. Replace them with your own estimates. Results are general planning information, not personalised financial or tax advice.
Understand the result
How it is calculated
Profit per unit = selling price − unit cost. Gross margin = profit ÷ selling price × 100. Markup = profit ÷ unit cost × 100. Target price = unit cost ÷ (1 − target margin ÷ 100).
A worked example
A product costing £60 and selling for £100 earns £40 gross profit. Its margin is 40%, but its markup is 66.67%. A 40% target margin on a £60 cost requires a £100 selling price.
Common questions
Can margin be negative?
Yes. Selling below unit cost creates a loss and a negative gross margin. Zero revenue makes the margin undefined.
Is a 50% markup a 50% margin?
No. A £20 cost marked up by 50% sells for £30. The £10 profit is 33.33% of the selling price.