Profit Margin & Markup Calculator
Enter a selling price and a cost to get gross margin, markup, and profit in real time. Margin and markup are easy to confuse — this shows both from the same two numbers.
How profit margin is calculated
Gross margin % = (price − cost) ÷ price × 100. It's the share of each sale you keep after the cost to produce it. A $50 item that costs $20 has a $30 profit and a 60% gross margin.
How markup is calculated
Markup % = (price − cost) ÷ cost × 100. It's the profit expressed against your cost instead of your price. That same $50 item marked up from a $20 cost is a 150% markup — the same dollars, a bigger-looking percentage.
Margin vs. markup — why they differ
Margin uses price as the base; markup uses cost. Because price is always larger than cost, markup percentages look higher than margin percentages for the same sale. A 50% markup is only a 33% margin.
Frequently asked
What's the difference between margin and markup?+
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. Same dollar profit, different base — so markup always reads higher than margin.
How do you calculate profit margin?+
Subtract cost from selling price, divide by the selling price, and multiply by 100. (price − cost) ÷ price × 100.
How do you calculate markup?+
Subtract cost from selling price, divide by the cost, and multiply by 100. (price − cost) ÷ cost × 100.
Is a 50% markup the same as a 50% margin?+
No. A 50% markup equals a 33.3% margin. Markup is measured against cost and margin against price, so the two never match except at 0%.
This is one module inside Playbook
Playbook is an entrepreneurship simulation where students use tools like this to build a real business. Launching for 2026–27.