FREE CALCULATOR
Profit Margin Calculator
Calculate your profit, profit margin and markup from revenue and total costs.
YOUR RESULT
Profit margin
0.00%
Profit: $0.00
Markup: 0.00%
Revenue: $0.00
Profit margin is profit divided by revenue. Markup is profit divided by cost.
HOW IT WORKS
How to calculate profit margin and markup
This calculator compares your revenue with your total cost. It shows your profit, profit margin and markup so you can see the same result from two different percentage perspectives.
The formula
revenue − total cost
Profit margin
profit ÷ revenue × 100
Markup
profit ÷ total cost × 100
Example
Suppose your revenue is $10,000 and your total cost is $6,000.
$4,000 ÷ $10,000 × 100 = 40.00% profit margin
$4,000 ÷ $6,000 × 100 = 66.67% markup
What the result means
Profit margin measures profit as a percentage of revenue. Markup measures profit as a percentage of cost. Because they use different denominators, the two percentages are normally different even when they describe the same transaction.
A profit margin close to 100% means costs are very small compared with revenue. Markup can be much higher than 100% when profit is many times larger than the underlying cost.
Frequently asked questions
Why is markup higher than profit margin?
Profit margin divides profit by revenue, while markup divides profit by cost. When cost is smaller than revenue, dividing by that smaller number produces a larger percentage.
Can profit margin be more than 100%?
With this calculator's standard formula, profit margin does not exceed 100% when revenue is positive and total cost is zero or greater. Markup, however, can exceed 100%.
What happens if total cost is zero?
Profit can still be calculated, but markup cannot be calculated normally because the formula would divide by zero.
Does this calculator include taxes or other expenses automatically?
No. Enter the total cost you want the calculation to use. Include any relevant costs in that value when they apply to your situation.