Profit Margin
Calculate profit, margin and markup.
About this tool
This tool calculates profit from selling price and cost, then reports profit margin and markup. Margin and markup are related but use different denominators, so they should not be treated as interchangeable percentages.
How to use this calculator
- Enter the selling price per item or transaction.
- Enter the matching cost for that item or transaction.
- Calculate profit, margin as a share of selling price, and markup as a share of cost.
Formula
Worked example
If an item costs ₹1,000 and sells for ₹1,500, profit is ₹500, margin is 500/1,500 = 33.33%, and markup is 500/1,000 = 50%.
Frequently asked questions
What is the difference between margin and markup?
Margin measures profit as a percentage of selling price. Markup measures profit as a percentage of cost, so the same transaction has different percentages.
Can profit margin be negative?
Yes. If selling price is below cost, profit is negative and margin is negative, indicating a loss before any other expenses.
Does this calculate net profit margin?
No. It compares the entered selling price and cost only. Overheads, taxes, shipping, fees and other operating expenses must be accounted for separately.
What if cost is zero?
Markup divides profit by cost, so it is undefined when cost is zero. Use a meaningful non-zero cost for markup calculations.
SolveKit provides general calculations for information and planning. Results depend on the values and assumptions entered. For financial, investment, payroll or tax decisions, confirm the applicable product terms and current rules with an authoritative source or qualified professional.