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Calculators · ~2 min

Profit margin calculator

“What is my profit margin on this product?”

Enter cost and selling price to get profit, margin % and markup % side by side — so you never confuse the two.

your numbers

Profit per unit

₹400

Profit margin

40.0%

Markup on cost

66.7%

Margin is profit as a share of the selling price; markup is profit as a share of cost. The same sale is a 40% margin but a 67% markup.

the guide

Profit margin vs markup: calculate both correctly

By Shivam Bhandari · Reviewed 31 October 2026 · How we write

Profit margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. They describe the same sale from two angles, and mixing them up is one of the most common pricing mistakes.

Margin matters for understanding how much of each sale you keep; markup is often how businesses set prices from costs.

the formula

Margin % = (Price − Cost) ÷ Price × 100 · Markup % = (Price − Cost) ÷ Cost × 100

  • · Margin is always lower than markup for the same sale.
  • · Calculate on prices before GST.

Worked example

  • Cost ₹600, selling price ₹1,000.
  • Profit ₹400. Margin = 400 ÷ 1,000 = 40%. Markup = 400 ÷ 600 ≈ 66.7%.
  • A retailer who wants a 40% margin needs a 66.7% markup, not 40%.

Tips

  1. 1Decide whether your targets are in margin or markup — and use one consistently.
  2. 2Include all variable costs (packaging, delivery, payment fees) in cost.
  3. 3Check margins after discounts, not just at list price.
  4. 4Compare your gross margin with industry benchmarks.

Frequently asked questions

What is a good profit margin?

It varies widely by industry — groceries may work on single-digit net margins while software can exceed 20%. Compare with your industry.

Why is margin lower than markup?

Margin divides profit by the higher selling price; markup divides by the lower cost.

How do I convert markup to margin?

Margin = Markup ÷ (1 + Markup). A 50% markup equals a 33.3% margin.

Should I include GST in margin calculations?

No. Use prices before GST, because GST is collected for the government.