Free tool
Profit margin calculator
Your cost, your selling price, and you get your profit, your margin, your markup and your price multiplier. Aiming for a margin? Enter your target margin: the tool gives you the selling price that hits it.
Profit is what you keep on a sale, before tax: selling price minus cost. Divided by the selling price, it gives your margin; divided by the cost, your markup. Same amount, seen from two floors.
What your selling price contains
How your margin is calculated
Profit = Selling price − Cost Markup = Profit ÷ Cost Margin = Profit ÷ Selling price Price multiplier = Selling price ÷ Cost Minimum ROAS = 1 ÷ Margin Selling price = Cost ÷ (1 − Target margin)
With the starting numbers, a product bought at 60 € and sold at 100 € leaves 40 € of profit. Divided by the cost, that is a 66.67 % markup. Divided by the price, a 40 % margin. Same 40 €, two percentages, because the base changes.
Markup starts from cost, margin starts from price. Use markup to set a price from a known cost, and margin to check what you keep on every sale.
For advertising, I recommend starting from margin: it tells you what is left on every euro sold. At a 40 % margin, every euro spent on ads has to bring back at least 2.50 € in revenue. That is your minimum ROAS, on gross margin only; your other costs push it higher.
With a B2B company I work with, measuring whether the campaigns paid off started with this number: the margin kept on each project, which the team already tracked in a spreadsheet. Every calculation that followed rests on it.
What makes the calculation reliable
- Everything before tax. VAT or sales tax goes to the state: including it inflates your price and skews both percentages.
- A complete cost. Purchase, production, shipping to you: everything it takes to sell the product. Company costs that do not depend on a sale belong in the net profit margin calculator.
- Margin over the whole customer relationship. A customer who comes back leaves their margin several times: the customer lifetime value calculator gives it to you, and the lead value calculator tells you what each lead is worth.
Frequently asked questions
How do you calculate profit margin?
Divide your profit by your selling price before tax. 40 € of profit on a 100 € sale is a 40 % margin.
What is the difference between markup and margin?
Markup compares profit to cost, margin compares it to the selling price. For the same sale, markup is always the higher of the two.
How do I calculate a selling price from a margin?
Divide your cost by (1 − target margin). For a 40 % margin on a 60 € cost, the selling price is 100 € before tax.
How do I calculate net profit margin?
Net profit margin also takes away company costs, depreciation and tax. The net profit margin calculator works through it step by step.
Your margin tells you what your ads can cost
I connect your campaigns to your real margin, so every euro spent on ads brings back more.
Run My Ads On Margin
Growth partner
Positioning, acquisition, innovation: together we build a lasting growth system.
Théo MaupiléFreelance Paid Media
Google PartnerSuperMalter
