Margin Calculator
Adjust the inputs below. Results update as you type.
How it works
Margin = (revenue − cost) / revenue × 100%. Markup = (revenue − cost) / cost × 100%. Margin and markup are different: a 50% markup is only a 33% margin. To find selling price from cost and target margin: price = cost / (1 − margin%). Gross margin ignores operating expenses; net margin subtracts all costs. Retail typically targets 40–60% gross margin; restaurants 60–70%.
Input guidance
- Use realistic rates from lender or provider quotes instead of headline averages.
- Model conservative, baseline, and optimistic scenarios before deciding.
- Include recurring real-world costs (fees, taxes, insurance, maintenance) where relevant.
The formula
Gross margin = (price − cost) ÷ price. Markup = (price − cost) ÷ cost. Margin is the profit as a share of the selling price; markup is profit as a share of cost.
Worked example
An item costing $40 sold for $100 has a margin of (100 − 40)/100 = 60% and a markup of (100 − 40)/40 = 150%.
More examples to test
- Conservative case: use a higher interest rate and lower growth assumptions to stress-test affordability.
- Optimistic case: use a lower rate with stable income assumptions to compare upside potential.
How to interpret results
Treat this as a planning model, not a final approval tool. Compare at least two scenarios and focus on total-cost and cash-flow trade-offs.
When this can be inaccurate
Results can diverge due to fees, changing rates, tax rules, lender policies, and behavior changes that simplified models cannot fully capture.
Change history
- July 2026: Quality-reviewed for publication with formula checks and explanatory copy updates.
Site-wide corrections also appear on the corrections log.
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Frequently asked questions
What is the difference between margin and markup?+
Margin measures profit against the selling price; markup measures it against cost. The same dollar profit gives a lower margin percentage than markup percentage.
Why does this distinction matter?+
Confusing the two leads to underpricing. A 50% markup is only a 33% margin, so pricing on the wrong base can erase expected profit.
How do I set a price from a target margin?+
Price = cost ÷ (1 − target margin). For a 40% margin on a $30 cost, price = 30 ÷ 0.6 = $50.
How should I use this result?+
Treat it as a planning estimate. Compare at least two realistic scenarios, then confirm with statements, quotes, or a qualified professional before acting.
How often should I refresh assumptions?+
Refresh whenever rates, income, costs, or policy limits change materially, and before making irreversible commitments.