Free tool
Profit Margin Calculator
Revenue and costs in, your margin and markup out.
Your profit margin is the share of revenue you actually keep after costs. Enter two numbers to get your margin, your profit, and the markup that goes with it.
Profit margin = (revenue − costs) ÷ revenue, as a percentage. It's the slice of each sale you keep, and it's the number that decides whether volume is worth chasing.
Margin and markup are not the same thing, and confusing them costs real money. Markup is profit over cost; margin is profit over revenue. A 50% markup is only a 33% margin.
What counts as a healthy margin depends entirely on the business — software runs high, retail and food run thin — so compare against your own industry, not a universal number.
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Common questions
How do I calculate profit margin?
Subtract your costs from your revenue, then divide by revenue and multiply by 100. That's your net profit margin as a percentage. Enter revenue and total costs above to get it, plus your profit and markup, instantly.
What is the difference between margin and markup?
Markup is profit as a percentage of cost; margin is profit as a percentage of revenue. They're always different — a 50% markup is a 33% margin. Pricing off the wrong one is a common way to under-earn without realising it.
What is a good profit margin?
It depends entirely on the industry. Software and digital products can run 70%+, while retail, food, and hardware often sit in single digits. Compare your margin to others in your specific space, not a single universal benchmark.