TopicDrill

Margin Calculator

Work out your gross profit margin in seconds. Enter a cost and selling price, or a cost and target margin, then press Calculate to see profit, margin percent and the equivalent markup.

Written by TopicDrill Editorial Team·Updated June 2026

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Your inputs

Choose how you want to work, then press Calculate.

$
$

Gross margin

40.0%

Cost$60
Gross profit$40
Selling price$100
Equivalent markup66.7%

Where the price goes

Cost Profit
40%marginSelling price$100Cost $60Profit $40

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How the margin calculator works

Gross margin shows how much of each sale you keep after paying for the goods themselves. The tool takes your cost and selling price, subtracts one from the other to find the gross profit, and then expresses that profit as a percentage of the price. The donut shows how the price splits between cost and profit at a glance.

Prefer to price from a goal instead? Switch to the target margin mode and the calculator runs the math backward, telling you the exact selling price needed to lock in the margin you want on a given cost.

A quick example

Suppose a product costs you 60 dollars and you sell it for 100 dollars. Your gross profit is 40 dollars, your gross margin is 40 percent, and the equivalent markup on cost is about 67 percent. The same 40 dollars of profit looks larger as a markup because it is compared to the smaller cost figure rather than the price.

Things to keep in mind

Gross margin only covers the cost of the goods, not rent, payroll, shipping or marketing, so a healthy gross margin can still leave a thin net profit. For a wider view of profit measures, the U.S. Small Business Administration has helpful guidance at SBA.gov. To see the same profit from the cost side, try our markup calculator.

Frequently asked questions

What is gross margin?

Gross margin is profit measured as a share of the selling price. If you sell an item for 100 dollars and it cost you 60 dollars, your gross profit is 40 dollars and your gross margin is 40 percent. It tells you how much of every dollar of revenue you keep before other expenses.

How do I calculate margin from cost and price?

Subtract the cost from the selling price to get gross profit, then divide that profit by the selling price and multiply by 100. In short, margin percent equals selling price minus cost, divided by selling price, times 100.

What is the difference between margin and markup?

Both describe the same profit, but against a different base. Margin divides profit by the selling price, while markup divides the same profit by the cost. Because the price is always larger than the cost, the margin percent is always smaller than the markup percent for the same item.

How do I set a price to hit a target margin?

Switch the tool to the target margin mode and enter your cost and the margin you want. The price is found by dividing the cost by one minus the margin written as a decimal. For a 40 percent margin on a 60 dollar cost, the price is 60 divided by 0.6, which is 100 dollars.

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