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Profit Margin Calculator

Enter your revenue and total cost to see how much profit a product, service, or business makes, and what share of revenue that profit represents.

Formula / method: Profit = Revenue - Cost. Profit margin = (Profit / Revenue) x 100. Markup = (Profit / Cost) x 100.

Enter your figures and click Calculate.

How to Use

  1. Enter total revenue for the period or product.
  2. Enter total cost, including materials, labor, and direct expenses.
  3. Click Calculate Profit Margin.
  4. Compare the margin with your target and with past periods.
  5. Copy the result for your records or pricing review.

Why This Matters

Margin tells you whether a business is healthy, not just busy. Two shops can both sell $10,000 of goods, but if one spends $9,000 and the other spends $6,000, their futures are very different. Margin also guides pricing: if a margin is too thin, a small cost increase or discount can wipe out profit. Tracking margin over time shows whether supplier prices, wages, or discounting are quietly eating into earnings before cash flow becomes a problem.

Frequently Asked Questions

What is the difference between margin and markup?

Margin is profit as a percentage of revenue (the selling price). Markup is profit as a percentage of cost. A 25 percent margin equals a 33.3 percent markup on the same sale.

What is a good profit margin?

It depends on the industry. Grocery stores often run on thin margins, while software and consulting can sustain higher margins. Compare with similar businesses, not with unrelated industries.

Should I include overhead costs?

For a full business margin, yes. For a single product margin, use direct costs first, then check the overall margin after overhead.

Can I use this for a single product?

Yes. Enter that product's selling price as revenue and its direct cost as cost.

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