Profit Margin calculator

How to calculate it

Profit = selling price − item cost − selling fees. Margin = profit ÷ selling price × 100. Markup = profit ÷ total cost × 100.

Worked example

If an item sells for $50, costs $30, and has $2 of fees, profit is $18, margin is 36%, and markup on total cost is 56.25%.

Results are estimates. Check your inputs and account for any costs not included before making financial decisions.

What this margin includes

This tool subtracts the product cost and the additional cost per sale you enter. It is not automatically a net business margin. Rent, salaries, refunds and income tax reduce what you ultimately keep. Use amounts from the same sale, or totals from the same period, throughout.

Do not confuse margin with markup

If an item costs 60 and sells for 100, profit is 40. Margin is 40 ÷ 100 = 40%, while markup is 40 ÷ 60 = 66.67%. A 40% markup on a cost of 60 would instead give a price of 84.

Try the decision, not just the formula

Pin your current result, then increase additional costs to include packaging or payment fees. The comparison shows how much profit disappears. If your selling price includes tax that you pass to a tax authority, use revenue excluding that tax and a consistent cost basis.

Planning estimate only. Check all costs, tax treatment and your actual circumstances. Calculation and rounding notes.