# Margin calculator

https://salesbond.app/tools/margin-calculator/
Updated: 2026-11-05

# Margin Calculator

Margin is profit as a share of the selling price: (price − cost) ÷ price × 100. An item that costs 80 and sells for 100 has a profit of 20, a 20% margin and a 25% markup, because markup divides the same profit by cost. For a target margin, price = cost ÷ (1 − margin).

Enter your cost and price to get profit, margin and markup in any currency. Or start from the margin or markup you want and get the selling price, or from a price and margin to find the most you can pay for an item.

## Margin formula

Profit = price − cost. Margin (%) = profit ÷ price × 100. Markup (%) = profit ÷ cost × 100. Price for a target margin = cost ÷ (1 − margin ÷ 100).

## Worked example

| Case | Result |
| --- | --- |
| Cost 80.00, price 100.00: profit | 20.00 |
| Margin | 20.00% |
| Markup | 25.00% |
| 50% markup on a cost of 40.00: price, margin | 60.00, 33.33% |
| Target 30% margin on a cost of 80.00: price | 114.29 |

## Markup vs margin

The same profit looks bigger as markup than as margin, because cost is smaller than price. Mixing them up is the classic pricing mistake: adding a 30% markup to cost gives only a 23.08% margin. Use this table to convert one into the other.

| Margin | Markup needed |
| --- | --- |
| 10% | 11.11% |
| 20% | 25.00% |
| 25% | 33.33% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100.00% |
| 60% | 150.00% |
| 75% | 300.00% |

## Gross, operating and net margin

This calculator gives the gross margin of one product, service or deal: its price against its direct cost. For a whole business, gross margin compares revenue with the cost of goods sold, operating margin also subtracts running costs such as salaries and rent, and net margin subtracts everything, including interest and tax. The [gross profit calculator](https://salesbond.app/tools/gross-profit-calculator/) works from revenue and COGS.

## Margin on a discounted deal

Discounts come straight out of margin. A 10% discount on the item above leaves 90 − 80 = 10 of profit: the margin falls from 20% to 11.11%, and you need twice the volume to earn the same profit. Check the margin before you approve a discount.

## Frequently asked questions

### How do you calculate margin?

Subtract the cost from the selling price to get the profit, divide the profit by the selling price and multiply by 100. An item that costs 80 and sells for 100 earns 20 of profit, a 20% margin.

### What is the difference between margin and markup?

Both start from the same profit. Margin divides it by the selling price, markup divides it by the cost. That is why markup is always the bigger number: a 25% markup on cost gives a 20% margin on price.

### How do I convert markup to margin?

Margin = markup ÷ (100 + markup) × 100, and markup = margin ÷ (100 − margin) × 100. A 50% markup is a 33.33% margin; a 50% margin needs a 100% markup.

### How do I set a price for a target margin?

Divide the cost by 1 minus the margin as a decimal: price = cost ÷ (1 − margin). For a 30% margin on a cost of 80, the price is 80 ÷ 0.70 = 114.29.

### Can a margin be more than 100%?

No. Margin is a share of the selling price, so it can approach 100% but never reach it, and it turns negative when you sell below cost. Markup has no upper limit: selling at three times the cost is a 200% markup.

### What is a good profit margin?

It depends on the industry. Software and services often keep gross margins above 60%, while grocery, wholesale and distribution live on thin ones. Compare yourself with your own sector, for example in the margin tables NYU Stern publishes.

Related tools: [gross profit calculator](https://salesbond.app/tools/gross-profit-calculator/), [markup calculator](https://salesbond.app/tools/markup-calculator/), [profit margin calculator (US)](https://salesbond.app/tools/profit-margin-calculator/). More on sales and running a sales team on the [SalesBond blog](https://salesbond.app/blog/) and the [home page](https://salesbond.app/).

## Official sources

- [IFRS Foundation: IAS 1 Presentation of Financial Statements](https://www.ifrs.org/issued-standards/list-of-standards/ias-1-presentation-of-financial-statements/) — gross profit as revenue less cost of sales.
- [IFRS Foundation: IAS 2 Inventories](https://www.ifrs.org/issued-standards/list-of-standards/ias-2-inventories/) — what belongs in the cost of goods sold.
- [NYU Stern (Damodaran): margins by sector](https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html) — gross, operating and net margins by industry.

**Updated on Nov 5, 2026.** This calculator is for information only and is not tax, legal or payroll advice. Results come from the formulas above and do not include taxes, overhead or payment fees.