What is profit margin?

Profit margin is the percentage of revenue that remains as profit after deducting costs. Formula: Margin = ((Revenue - Cost) / Revenue) × 100. A 30% margin means 30p of every £1 in sales is profit.

What's the difference between margin and markup?

Margin is profit as a percentage of revenue (selling price). Markup is profit as a percentage of cost. Example: £10 cost, £15 revenue = 33.3% margin but 50% markup.

What is a good profit margin?

It varies by industry. Retail averages 2-5%, software/SaaS 70-90%, consulting 15-25%, manufacturing 5-10%. Generally, 10-20% is considered healthy for most businesses.

How do I calculate selling price from cost and margin?

Use the formula: Selling Price = Cost ÷ (1 - Margin%). For example, with £10 cost and 30% target margin: £10 ÷ (1 - 0.30) = £10 ÷ 0.70 = £14.29

Why is my margin always less than my markup?

Because margin uses revenue (a larger number) as the denominator, while markup uses cost (a smaller number). Margin will always be lower than markup for the same profit amount.

Profit Margin Calculator

Calculate profit margin, markup percentage, and selling prices instantly. Perfect for pricing products, quoting services, and analysing business profitability.

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Profit margin = ((Revenue - Cost) / Revenue) × 100. Markup = ((Revenue - Cost) / Cost) × 100. A 50% markup equals a 33.3% margin.

Enter your numbers below to calculate margin, markup, and profit.

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Cost + RevenueCalculate margin & markup

Cost + Margin %Calculate selling price

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Cost Price

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Selling Price (Revenue)

£

Profit Margin Formulas

Margin: ((Revenue - Cost) ÷ Revenue) × 100
Markup: ((Revenue - Cost) ÷ Cost) × 100
Selling Price: Cost ÷ (1 - Margin %)

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Last updated: January 2026 • Built with care by iForge Apps

How to use this tool

1

Select your calculation mode: Cost + Revenue, Cost + Margin, or Revenue + Margin

2

Choose your currency from the dropdown

3

Enter the values you know

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