Margin Calculator
Last updated: November 14, 2026
Direct answer. Margin % = (Price − Cost) ÷ Price × 100. Selling price from a margin is Cost ÷ (1 − Margin % ÷ 100). A $50 cost and $75 price is a 33.33% margin. A 40% margin on a $50 cost requires an $83.33 price.
Profit margin is the profit measured as a percentage of selling price. U.S. income statements, dashboards, and many lender conversations use margin, not markup. This calculator finds the margin percent from a cost and a price, or builds the price that delivers a target margin.
Margin Calculator
Profit margin is the profit as a percentage of the selling price. It is not the same figure as markup, which is based on cost.
Result
Key takeaways
- Margin is profit divided by selling price, times 100.
- A $50 cost and $75 price is a 33.33% margin, not a 50% margin.
- A 40% margin on a $50 cost is an $83.33 selling price.
- A margin of 100% or more cannot set a finite price, because that would divide by zero or a negative remainder.
How to use this calculator
- Choose whether you want the margin percent or a selling price.
- To find the percent, enter cost and selling price in dollars.
- To find a price, enter cost and the target margin percent. A margin of 100% or higher is rejected with a plain-language error.
The formula
Profit is still Price − Cost. Margin divides that profit by price. Units are dollars for money and percent for the margin.
Worked examples
| Cost | Selling price | Profit | Margin |
|---|---|---|---|
| $50 | $75 | $25 | 33.33% |
| $50 | $83.33 | $33.33 | 40% |
| $80 | $80 | $0 | 0% |
Profit is 25. 25 ÷ 75 × 100 = 33.33% margin.
Selling price = 50 ÷ (1 − 0.40) = 50 ÷ 0.60 = 83.33. Profit is 33.33, which is 40% of 83.33.
When this is useful in the United States
A shop owner reviewing a monthly P&L in the United States usually talks in margin: how much of each sales dollar was left after cost of goods.
A buyer who is allowed a 40% margin can turn a landed cost into the lowest ticket price that still hits that target.
If a coupon will cut the selling price, rerun the margin on the net price, not on the list price, so the percent still matches cash collected.
Common mistakes
- Treating a 50% markup as a 50% margin. Those match only in special cases, not on $50 and $75.
- Trying to price at a 100% margin. That would require a price of cost ÷ 0, which is undefined.
- Using a selling price of 0 when finding a percent. Margin would be undefined.
Margin is a percent of the selling price you actually collect. Taxes collected for a government, and tips that belong to staff, are not profit and should not be left inside the price figure if you want a merchandise margin. Cost should include the goods or services sold; whether you also include freight is an accounting choice, but it must be consistent from one month to the next. Margin is the language of many U.S. profit-and-loss reviews because it answers how many cents of each sales dollar remain after cost. It is sensitive to the selling price you actually collect, so a coupon, a refund, or a price match should be reflected in that price if you want the margin to match cash. You cannot price at a 100% margin, and a margin close to 100% implies a very large markup. If a contract talks about “40 points,” confirm whether that means 40% margin or 40% markup before you type the number. This tool does not allocate overhead, wages, or rent; those belong in a broader margin only if you have decided to include them in cost. If a report already states margin, do not convert it to markup in your head and type that into this tool. Use the margin fields for margin and the markup calculator for markup. A quick check is that margin is always smaller than markup when both are defined and cost is positive. A target margin can be applied to a single SKU or to a whole invoice, but the cost and price you enter must belong to the same basket. Mixing a case cost with a single-unit price will produce a margin that cannot be checked against a receipt. Convert to one unit first, then type the two dollar amounts.
Frequently asked questions
What is the margin on a $50 cost and a $75 price?
It is 33.33%, because $25 is one-third of the $75 price.
How do I price for a 40% margin?
Divide cost by 0.60. A $50 cost needs an $83.33 price.
Why can’t I enter a 100% margin to set a price?
A 100% margin would mean the entire price is profit and the cost share is zero. Dividing cost by zero is undefined, so the calculator stops with an error.
Should I use margin or markup with a supplier?
Use the language the other party uses. This site keeps the two tools separate so the base — cost or price — stays explicit.