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Profit Margin Calculator
See how profitable a sale, product, or whole business really is. Enter revenue and cost, press Calculate, and get the profit margin, markup, and a clear split of every revenue dollar.
Written by TopicDrill Editorial Team·Updated June 2026
Where each revenue dollar goes
Cost$6,500
Profit$3,500
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How the profit margin calculator works
The tool starts by subtracting your total cost from your revenue to find profit. It then expresses that profit two ways: as a margin, which divides profit by revenue, and as a markup, which divides profit by cost. Both describe the same dollars from a different angle.
The donut chart shows where each dollar of revenue ends up. The grey slice is the portion consumed by cost, and the orange slice is what you keep as profit. A thin orange slice means most of your sales are paying for the goods themselves.
A quick example
Suppose you sell a handmade item for $100 and it costs you $65 to make and ship. Your profit is $35, which is a 35 percent margin on the sale but a roughly 54 percent markup on the cost. Knowing both numbers helps you price new products without eroding the margin you depend on.
Things to keep in mind
Margins can mislead if you forget hidden costs like returns, payment fees and shipping. The U.S. Small Business Administration has practical guidance on pricing and managing a small business. To factor income tax into your bottom line, switch over to our profit margin with tax calculator.
Frequently asked questions
How do you calculate profit margin?
Subtract total cost from revenue to get profit, then divide that profit by revenue and multiply by 100. For example, $3,500 of profit on $10,000 of sales is a 35 percent margin. Margin always measures profit against sales, not against cost.
What is the difference between margin and markup?
Margin divides profit by revenue, while markup divides profit by cost. A product that costs $65 and sells for $100 has a 35 percent margin but a roughly 54 percent markup. Markup is always the larger number because cost is smaller than the selling price.
What counts as a good profit margin?
It depends entirely on the industry. Grocery stores often run on single-digit margins, while software firms can clear 70 percent or more. Compare your margin to peers in the same sector rather than to a fixed benchmark.
Should I use gross or net cost in this tool?
Enter whichever cost matches the profit you want to measure. Use cost of goods sold for a gross margin, or include operating expenses, interest and overhead for a fuller net margin. Be consistent so the percentage is meaningful.
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