Enter cost and selling price to get gross profit, margin and markup – or enter a target margin to get the price you should charge.
By TanLabs · Formulas cross-checked against the free spreadsheet · Updated 2026-10-31 · Runs in your browser – nothing you type is sent anywhere
With cost $40, selling price $65, target margin 40%:
Margin 38.5% · Profit $25
Markup 62.5% · Price for a 40% margin: $66.67
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Gross profit = price − cost. Margin = profit ÷ price. Markup = profit ÷ cost. Price for target margin m = cost ÷ (1 − m).
The same profit looks very different as markup or margin. For a $40 cost:
| Markup on cost | Equals gross margin | Price for a $40 cost |
|---|---|---|
| 20% | 16.7% | $48.00 |
| 25% | 20.0% | $50.00 |
| 33.3% | 25.0% | $53.33 |
| 50% | 33.3% | $60.00 |
| 60% | 37.5% | $64.00 |
| 100% | 50.0% | $80.00 |
| 150% | 60.0% | $100.00 |
| 200% | 66.7% | $120.00 |
Doubling the cost (100% markup) is only a 50% margin. A 33% markup gives a 25% margin. Margin can never reach 100%, while markup has no upper limit.
Margin divides profit by the price, markup divides it by the cost. A 50% markup is only a 33% margin.
This is gross margin. Net margin also subtracts overheads like rent, software and tax.
No. Markup can, margin cannot.
It depends on the industry. Grocery and fuel run on thin gross margins; software and digital products can be very high. Compare with businesses like yours and make sure the gross profit covers your overheads.
Price = cost ÷ (1 − margin). For a $40 cost and a 40% margin: $40 ÷ 0.60 = $66.67.
Net profit ÷ revenue, after all expenses, interest and tax. It is always lower than gross margin.