Free browser tool
Profit margin and markup calculator
Margin compares profit with selling price. Markup compares profit with cost. They describe the same transaction using different denominators, so a target markup is not the same as a target margin. Use the calculator to check the relationship before quoting.
Your result
Enter valid costs and a target or selling price to see the result.
The formulas
Profit = selling price − cost.
Margin = profit ÷ selling price × 100.
Markup = profit ÷ cost × 100.
Price for a target margin = cost ÷ (1 − margin ÷ 100).
Price for a target markup = cost × (1 + markup ÷ 100).
Round the price for your invoice, then check the resulting margin. This calculator does not determine which costs or taxes apply to your business.
How it works.
- Build a full cost for the job or item, including direct labor, materials and the overhead you allocate. Enter that cost in USD.
- Choose whether you know the selling price or want to calculate one from a target margin or markup. Enter the corresponding value.
- Read the calculated price, profit and both percentages together. The formulas below the result show which denominator each uses.
- Check the result against your actual business costs and tax obligations before using it in a quote. Your entries stay in this page and are cleared when you leave; the tool does not save prices in Microtra.
Useful answers.
Why are margin and markup different?
Margin divides profit by the selling price; markup divides profit by cost. Because the base changes, the same profit produces different percentages. The calculator displays both so you can compare like with like.
What should I include in cost?
Use the costs relevant to your decision, including labor, materials and a sensible allocation of overhead. A result based only on materials can overstate what the work leaves for the business.
Does this calculate net profit or tax?
No. The result is the difference between the selling price and the cost you entered. Costs you omit, tax and other business expenses can change what you keep.
Why can I not set a margin at or above the whole selling price?
With a positive cost, that target cannot produce a finite selling price using the margin formula. Enter a target below that boundary or review the cost and pricing method.
Keep exploring.
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