Compare common target margins
See the selling price, profit per unit and equivalent markup required for common margin targets.
| Target margin | Selling price | Profit per unit | Equivalent markup | Total profit |
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Free business calculator
Profit Margin & Markup Calculator
Calculate profit margin, markup, profit per unit and the selling price needed to reach your target margin.
Your results will appear here
Enter your cost and price information to calculate margin and markup.
Your results
Based on the values entered above.
Profit margin
33.33%
£10.00 profit per unit
Selling price
£30.00
Profit per unit
£10.00
Profit margin
33.33%
Markup
50.00%
Total revenue
£3,000.00
Total profit
£1,000.00
A 50% markup produces a 33.33% profit margin.
Profit margin formula
Margin measures profit as a percentage of the selling price.
Margin = (Selling price − Cost) ÷ Selling price × 100
Markup formula
Markup measures profit as a percentage of cost.
Markup = (Selling price − Cost) ÷ Cost × 100
Example: cost £20, price £30
The profit is £10 per unit. That equals a 33.33% margin because £10 is one-third of the £30 selling price.
£10 ÷ £30 × 100 = 33.33% margin
The same example as markup
The same £10 profit equals a 50% markup because £10 is half of the £20 cost.
£10 ÷ £20 × 100 = 50% markup
How to use this calculator
Choose the calculation that matches the information you already have.
1
Enter your cost
Include the direct cost to buy or produce one unit. Add packaging or other unit-level costs where relevant.
2
Enter price or target margin
Use your actual selling price or choose the margin you want the product to achieve.
3
Review profit and markup
Compare margin, markup, unit profit, total revenue and total profit before making pricing decisions.
Frequently asked questions
What is the difference between margin and markup?
Profit margin uses selling price as the base. Markup uses cost as the base. The same product can therefore have a 33.33% margin and a 50% markup.
How do I calculate profit margin?
Subtract cost from selling price to get profit. Divide profit by selling price and multiply by 100.
How do I calculate markup?
Subtract cost from selling price to get profit. Divide profit by cost and multiply by 100.
How do I calculate selling price from a target margin?
Convert the target margin to a decimal and divide cost by one minus that decimal. For example, with a £20 cost and a 40% target margin, £20 ÷ 0.60 gives a selling price of £33.33.
Does this calculate net profit?
No. It estimates gross profit using the cost per unit entered. Rent, wages, payment fees, tax, marketing, returns and overheads are not automatically included.