Profit Margin Calculator
Know what a job earns before you send the price.
Enter cost and price for margin, markup, profit and return on cost, or work backwards from the margin you need to the price that delivers it. Break-even included.
- Free, no signup
- Runs in your browser
- Margin and markup
- Break-even units
Enter details
Cost ($)
Selling price ($)
Quantity sold
Fixed costs ($)
Quick examples
Your profit estimate
$50.00
Profit - $100 cost $150 price
Profit = Selling - Cost = 150 - 100 = $50. Margin = Profit / Selling * 100 = 50 / 150 * 100 = 33.33%. Markup = Profit / Cost * 100 = 50 / 100 * 100 = 50%
Watch the calculator fill itself in
The same panel you used above, pricing a $40 item three ways: from a price you have in mind, from the margin you need, and from a markup. Every figure on the right updates as the fields are typed.
Your profit estimate
$0.00
Profit per unit
Margin = Profit / Selling price * 100
If you discount
Start with the amount you need to borrow
Jump to any part to replay it. The formulas behind these numbers are set out further down the page.
Gross, operating and net profit margin: which one is this?
Three different numbers share the name, and quoting the wrong one is how a business that looks profitable per job runs out of money. The calculator above works out the first.
Gross profit margin
(Revenue − COGS) ÷ Revenue × 100This is what the calculator gives you. Cost of goods sold means the direct cost of what you sold: materials, the hours that went into it, delivery. Nothing else. It tells you whether the price on a job or a product is right.
Operating profit margin
Operating profit ÷ Revenue × 100Gross profit after the costs of running the business: rent, software, insurance, wages that are not on a job. It answers whether the whole operation works, not whether one price does.
Net profit margin
Net profit ÷ Revenue × 100Everything taken off, including interest and tax. It is the figure a lender or an accountant means, and it is always the smallest of the three.
A 40% gross margin can still leave a business losing money, because gross margin has not paid the rent yet. Price with gross margin, check the health of the business with net.
How to use your profit margin when you quote and invoice
A margin only exists if the paperwork holds it. These are the four places a healthy number on this page quietly turns into a smaller one by the time you are paid.
Price the quote, not the invoice
The margin is decided when you send the price, not when you bill. Work out the figure here, then put it in writing with what is included and what is not, because most margin is lost to work that was assumed rather than quoted.
Add 40% instead of dividing and you would quote $140, a 28.6% margin. The quote generator keeps the line items you priced.
Every line carries its own margin
Labour, materials, disposal and call-out rarely earn the same. Pricing them as one blended number is how a job heavy on materials ends up earning almost nothing while the invoice still looks healthy.
Run the margin per line here, then itemise them on the invoice so you can see afterwards which part of the work paid.
A discount is not a small thing
On a 30% margin, taking 10% off the price removes a third of the profit on that sale, so you would need to sell half as much again to end up where you started. If you must move, move the scope rather than the price.
Where a client is pushing for a lower number, a deposit and staged payments on the quote are usually worth more to them than the discount, and cost you nothing.
Late payment eats the margin you calculated
Money owed for 60 days is money you are financing. On thin margins the cost of waiting can exceed the profit on the job, which is the point at which a healthy-looking margin is fiction.
Invoice the day the work finishes, put the due date and late fee on the page, and price a known slow payer at a margin that covers the wait.
A margin is a decision, not a calculation
The number on this page is only real once it survives the quote, the job and the wait to be paid. These are the three documents that decide whether it does, and the other two are free here as well.
Set the margin
Cost in, margin out, or name the margin you need and take the price it gives you. Check it per line rather than across the whole job.
You are hereQuote at that price
Put the price in writing with what is included, a deposit and a valid-until date, so the figure you calculated is the figure you are held to.
Open the Quote GeneratorInvoice and collect
Bill the day the work is done, with terms, a due date and a stated late fee. Waiting 60 days for payment can cost more than the job earned.
Open the Invoice GeneratorBorrowing to cover the gap between doing the work and being paid? The loan calculator prices that properly, fees included, so you can compare it against simply asking for a deposit.
Why use a profit margin calculator instead of a spreadsheet?
Calculating margin and markup in Excel can lead to mixing up formulas and pricing too low. Our calculator prevents that mistake and shows true profitability instantly.
Margin vs markup clarity
See both margin and markup side by side. Margin = profit / selling price. Markup = profit / cost. Example $100 cost $150 price margin 33.33% markup 50%. Margin is always lower than markup.
Three input modes
In price mode, enter the cost and selling price. In margin mode, enter the cost and desired margin percent to get the selling price. In markup mode, enter the cost and markup percent to get the selling price and margin.
Total profit and break even
Enter quantity sold and fixed costs to see total profit and break even units. Example 100 units $50 profit each $5,000 total. Fixed $2,000 break even 40 units.
Mobile first and client side
Works on iPhone, Android, desktop, no app install, calculations in browser, no data stored. Instant results for contractors, retailers, freelancers, restaurants, SaaS.
Quick margin, markup, selling price and break-even calculators
Each mini calculator works with custom values and links to full calculator above.
Profit Margin Calculator Mini
Want full breakdown?Profit: $50 | Margin: 33.33% | Markup: 50%
Markup Calculator Mini - what is markup?
Full math hereSelling price: $150 | Profit: $50 | Margin: 33.33%
Selling Price Calculator Mini - from margin
Go full calculatorSelling price: $142.86 | Profit: $42.86 | Formula: Cost / (1 - Margin)
Break Even Calculator Mini
Wanna calculate fully? Click hereBreak even: 200 units | Contribution: $50 per unit
| Cost | Price | Profit | Margin | Markup | ROI |
|---|
| Margin % | Markup % | Example $100 Cost | Selling Price |
|---|
What this profit margin calculator works out
Cost and selling price
Enter any cost example $100 and selling price example $150 for instant profit $50, margin 33.33 percent, markup 50 percent, ROI 50 percent. Supports product cost, service cost, variable cost.
Margin mode
Enter cost and desired margin percent to calculate selling price. Formula selling = cost / (1 - margin). Example $100 cost 30 percent margin selling = 100 / 0.7 = $142.86 profit $42.86.
Markup mode
Enter cost and markup percent to calculate selling price and margin. Formula selling = cost * (1 + markup). Example $100 cost 50 percent markup selling = $150 margin 33.33 percent.
Quantity and fixed costs
Enter the quantity sold to see total profit, and fixed costs to see break-even units. Contribution margin = selling - variable cost. Break even = fixed / contribution.
Comprehensive results
See cost, selling price, profit, margin, markup, ROI, total profit for quantity, break even units, cost percentage and profit percentage bars. Visual bar cost 66.67 percent profit 33.33 percent.
Mobile first design
Fully responsive on iPhone, Android, desktop, no app install needed. Client side only, no data stored. For retailers, contractors, restaurants, freelancers, SaaS, e-commerce.
How to calculate profit margin in three modes
Price mode - Enter cost and selling price
Input cost $100 and selling price $150. Calculator shows profit $50, margin 33.33 percent = 50 / 150 * 100, markup 50 percent = 50 / 100 * 100, ROI 50 percent.
Margin mode - Enter cost and desired margin
Input cost $100 and desired margin 30 percent. Calculator computes selling price $142.86 = 100 / (1 - 0.3), profit $42.86, markup 42.86 percent.
Markup mode - Enter cost and markup percent
Input cost $100 and markup 50 percent. Calculator computes selling price $150 = 100 * (1 + 0.5), profit $50, margin 33.33 percent.
Enter quantity and fixed costs
Enter quantity sold 100 units to see total profit $5,000 = $50 * 100. Enter fixed costs $2,000 to see break even 40 units = 2000 / 50 contribution.
Review results and export
View profit, margin, markup, ROI, total profit, break even, cost vs profit bar. Copy results or export to CSV for pricing strategy.
Profit margin examples by industry
Retail example - 33% margin
Cost $100 | Selling $150 | Profit $50 | Margin 33.33% | Markup 50% | ROI 50%
Total profit 100 units = $5,000 | Fixed $2,000 break even 40 units
Typical retail margin 20 to 50 percent.
Restaurant example - 66% margin
Cost $5 | Selling $15 | Profit $10 | Margin 66.67% | Markup 200% | ROI 200%
Total profit 200 plates = $2,000 | Fixed $1,000 break even 100 plates
Food cost ideally 25 to 35 percent margin 65 to 75 percent.
SaaS example - 80% margin
Cost $20 | Selling $100 | Profit $80 | Margin 80% | Markup 400% | ROI 400%
Total profit 500 users = $40,000 | Fixed $10,000 break even 125 users
Software margins high 70 to 90 percent due to low variable cost.
Construction example - 20% margin
Cost $80,000 | Selling $100,000 | Profit $20,000 | Margin 20% | Markup 25% | ROI 25%
Total profit 10 jobs = $200,000 | Fixed $50,000 break even 2.5 jobs
Construction margins 10 to 20 percent typical.
How is profit margin calculated? Margin and markup formulas
Profit margin formula
Profit = Selling - Cost. Margin = Profit / Selling * 100%. Example $100 cost $150 selling profit $50 margin 50 / 150 * 100 = 33.33%. Margin shows percent of selling price that is profit.
Markup formula
Markup = Profit / Cost * 100%. Example $100 cost $150 selling profit $50 markup 50 / 100 * 100 = 50%. Markup shows percent added to cost. Margin is always lower than markup.
Selling price from margin
Selling = Cost / (1 - Margin). Example $100 cost 30% margin selling = 100 / (1 - 0.3) = 100 / 0.7 = $142.86. Useful when you know desired margin.
Selling price from markup
Selling = Cost * (1 + Markup). Example $100 cost 50% markup selling = 100 * 1.5 = $150. Useful when you know markup to apply.
Break even formula
Contribution margin = Selling - Variable cost. Break even units = Fixed costs / Contribution margin. On $10,000 of fixed costs with $50 of contribution per sale, that is 200 units before any of it is profit. Break even dollars = break even units * selling price.
ROI vs margin
ROI = Profit / Cost * 100% same as markup. Margin = Profit / Selling * 100%. Example $100 cost $50 profit ROI 50% margin 33.33%. Use margin for pricing, ROI for investment return.
Profit margin formula and methodology
Profit = Selling Price - Cost. Margin = Profit / Selling Price * 100%. Markup = Profit / Cost * 100%. ROI = Profit / Cost * 100% same as markup. Selling from margin = Cost / (1 - Margin). Selling from markup = Cost * (1 + Markup). Break-even units = Fixed costs divided by the contribution each sale makes, where contribution is the selling price less the variable cost. Total profit = Profit per unit * Quantity. Cost percent = Cost / Selling * 100%. No storage no API, calculations in browser. Disclaimer estimates for informational purposes only.
Profit margin and markup questions, answered
Common questions about profit margin, markup, profit, selling price.
How do you calculate profit margin?
Profit margin equals profit divided by selling price times 100 percent. Profit equals selling price minus cost. Example $100 cost $150 selling profit $50 margin 33.33 percent.
What is the difference between margin and markup?
Margin is profit divided by selling price. Markup is profit divided by cost. The same $50 of profit on a $100 cost and a $150 price is a 33.33% margin and a 50% markup, which is why the two are never interchangeable. Margin is always lower than markup. Conversion margin = markup / (1 + markup). Markup = margin / (1 - margin).
How to calculate profit?
Profit equals selling price minus cost. Example $150 selling minus $100 cost equals $50 profit. Total profit equals profit per unit times quantity. Example $50 * 100 units = $5,000 total profit.
What is a good profit margin?
Good margin depends on industry. Retail 20 to 50 percent, software 70 to 90 percent, restaurants 3 to 9 percent net 60 to 70 percent gross, construction 10 to 20 percent, manufacturing 25 to 35 percent. Higher margin usually better but must remain competitive.
How to calculate break even?
Break even units are fixed costs divided by the contribution margin per unit, and the contribution margin is the selling price minus the variable cost. Fixed costs of $10,000 against $50 earned per sale clear at 200 units, which is $30,000 of sales at a $150 price.
How to calculate ROI?
ROI equals profit divided by cost times 100 percent. Same as markup. Example $100 cost $50 profit ROI 50 percent. ROI used for investment return, margin used for pricing strategy.
How much is 50 percent markup in margin?
50 percent markup equals 33.33 percent margin. Formula margin equals markup divided by 1 plus markup. 0.5 divided by 1.5 equals 33.33 percent. Conversely 33.33 percent margin equals 50 percent markup markup = margin / (1 - margin).
Is 30% a good profit margin?
For most service businesses it is healthy; for retail it is strong; for wholesale it would be unusual. What matters more than the benchmark is whether the margin covers your overhead once unbilled time, insurance, equipment and quiet weeks are counted.
Why is markup always a bigger number than margin?
They divide the same profit by different things. Markup divides by cost, margin divides by the selling price, and the price is always the larger of the two. A 50% markup on $100 gives a $150 price and a 33.33% margin.
How do I price a job to hit a 40% margin?
Divide the cost by 0.6, not add 40%. A $100 cost at a 40% margin is $166.67, while adding 40% gives $140 and a 28.6% margin. Margin mode above does the division for you.
What margin should I use on materials I buy for a client?
Anything from 10 to 25% is common, and it is not a mark-up for its own sake: it covers sourcing, collection, storage, breakage and the cash you have tied up until the invoice is paid.
How do I work out margin on an hourly rate?
Treat your true hourly cost as the cost figure: wages, tax, tools and the hours you cannot bill. If a chargeable hour actually costs $45 to deliver and you bill $75, the margin is 40%.
What is break-even and how many units do I need?
Fixed costs divided by the profit each sale contributes. With $4,000 of fixed costs a month and $50 profit per unit, you need 80 units before anything is profit.
What is the difference between gross and net margin?
Gross margin counts only the direct cost of what you sold. Net margin comes after rent, wages, software and everything else. This calculator works out gross margin per item or job.
Does a discount cost more than it looks?
Far more, because it comes entirely out of profit rather than out of the price. Put your own figures in above and the discount rows show exactly what 5% and 10% off leave you with, which is usually the moment people stop offering them casually.
How do I include VAT or sales tax?
Leave it out. Tax you collect is not yours, so margin should be calculated on the price excluding tax, or the margin will read higher than it is.
What is ROI on a job and how is it different from margin?
Return on cost divides profit by what you spent rather than by what you charged. A $100 cost and $50 profit is a 50% return on cost but a 33.33% margin. Lenders and partners tend to ask for the first, accountants for the second.
Should every line on an invoice carry the same margin?
Rarely. Labour usually carries more than materials, and call-out or disposal charges often carry very little. Pricing each line on its own margin is what stops a job with heavy materials from quietly earning nothing.
How do I set a price when a client asks for a discount?
Work backwards from the margin you can accept rather than down from your price. Put the cost in here, set the lowest margin that still pays, and the price it gives you is your floor.
What margin covers unpaid invoices?
If one invoice in twenty goes bad, every other job needs to carry that loss. On a 30% margin, a 5% write-off rate takes roughly a sixth of your profit, which is an argument for deposits and clear payment terms rather than for higher prices.
Can margin be more than 100%?
No. Margin is profit as a share of the selling price, so it approaches 100% but cannot reach it. Markup has no ceiling: a $5 cost sold at $50 is a 900% markup and a 90% margin.
How do I calculate margin on a subscription or retainer?
Use the monthly figures: what delivering the service costs you each month against what the client pays each month. Long agreements are worth checking every quarter, because costs drift while the retainer stays put.
How much should I raise prices to keep the same margin after a cost increase?
More than the cost rise, because the margin is a share of the price. On a 30% margin, a 10% cost increase needs roughly a 7% price rise to hold the same margin, which is easy to underestimate.
Is the profit margin calculator free and private?
Yes. There is no signup and nothing is uploaded: every figure is worked out in your browser and disappears when you close the tab.
Can I use these figures on a quote or invoice?
That is what they are for. Work out the price here, then send it as a quote with a validity date, and invoice the same lines when the work is done.
What margin should I quote a client?
Work back from what the job costs you, including unbilled time, then add the margin your business needs rather than the one you think the client expects. Price the quote at that figure and hold it: negotiating scope protects the margin, negotiating price does not.
How do I show margin on an invoice?
You do not. Clients see prices, not your costs. Keep the margin working in the background and itemise the invoice by what was delivered, which is also what makes it easy to check afterwards which lines actually paid.
A client wants 10% off. What do I say?
Offer something that costs you less than the profit does: a longer lead time, a smaller scope, or payment in full up front. If you do move on price, move the scope with it, so the margin you calculated survives the conversation.
How do late payments affect my margin?
Every day an invoice is unpaid is a day you are financing the client. On a thin margin, 60 day terms can cost more than the job earned, so clear due dates and a stated late fee are part of pricing, not an afterthought.
Should deposits change the price I quote?
They change the risk, not the cost, so they rarely justify a lower margin. What a deposit does is remove the financing cost and the chance of not being paid, which is often worth more than the discount a client is asking for.
How do you calculate profit margin percentage?
Subtract the cost from the selling price, divide by the selling price and multiply by 100. On a $100 cost and a $150 price that is 50 divided by 150, or a 33.33% profit margin percentage. The calculator above does it as you type.
What is the difference between gross profit margin and net profit margin?
Gross margin takes off only the cost of goods sold, the direct cost of what you sold. Net margin takes off everything else too: rent, wages, software, interest and tax. Gross tells you whether a price is right; net tells you whether the business is.
What is COGS and what should I include in it?
Cost of goods sold is the direct cost of delivering the thing you sold: materials, the labour that went into it, and delivery. Leave out rent, insurance, software and your own admin time, which belong in operating costs.
How do I calculate selling price from cost and margin?
Divide the cost by one minus the margin as a decimal. For a 40% margin on a $100 cost, that is 100 divided by 0.6, or $166.67. Adding 40% instead gives $140, which is only a 28.6% margin.
What is a good gross profit margin by industry?
Roughly: retail and hospitality often run 20 to 40%, trades and construction 20 to 35% on a job, professional services 40 to 60%, and software far higher because delivery costs almost nothing. Compare yourself to your own trade rather than to a general benchmark.
Is profit margin calculated on revenue or on cost?
On revenue. Margin divides profit by the selling price, markup divides it by cost, and that single difference is why the same job shows a 33% margin and a 50% markup.