Profit Margin Calculator

This calculator has two modes.

Mode 1: Calculate Margin

Use this mode to analyze the profitability of an existing or planned selling price.

Enter the cost per item: Add the amount you pay to purchase or produce one item.

Enter the selling price: Add the price you charge for each item.

Add extra costs per item: Include any additional costs you want to account for, such as packaging or handling.

Enter the quantity: Specify how many items you plan to sell or have sold.

Select a currency: Choose the currency for your results.

The calculator shows your profit per item and in total, profit margin, markup, revenue, total costs, and break-even price.

Mode 2: Target Price

Use this mode when you know your costs and want to find the selling price needed to reach a specific profit margin.

Enter your cost per item.

Add any extra costs per item.

Enter your desired profit margin, which must be below 100%.

Enter the quantity and select your currency.

The calculator estimates the selling price required to achieve your target margin.

Both modes update automatically as you change the inputs. You can reset the calculation or copy a summary of the results.

Calculate your profit margin, markup, and profit per item with this free Profit Margin Calculator. Enter your product cost and selling price to see how much profit you make on each sale and how your results change with additional costs and different quantities.

You can also use target price mode to find the selling price required to achieve a specific profit margin. The calculator updates results as you change the inputs and shows total revenue, total costs, profit, and break-even price.

Profit margin is the percentage of your selling revenue that remains as profit after subtracting the costs included in your calculation.

For example, if you sell an item for $100 and its total cost is $60, your profit is $40. Your profit margin is 40% because $40 represents 40% of the $100 selling price.

A higher profit margin means a larger share of revenue remains as profit. Businesses use this measurement to evaluate product pricing, compare sales performance, and understand profitability.

Profit margin and markup both measure the relationship between profit and cost, but they use different reference amounts.

Profit margin expresses profit as a percentage of the selling price.

Markup expresses profit as a percentage of the cost.

For example, consider an item with a total cost of $60 and a selling price of $100:

The profit is the same in both calculations, but the percentages differ because the denominators are different.

Profit Margin Formula

[
\text{Profit Margin} =
\frac{\text{Selling Price} - \text{Total Cost}}{\text{Selling Price}}
\times 100
]

Markup Formula

[
\text{Markup} =
\frac{\text{Selling Price} - \text{Total Cost}}{\text{Total Cost}}
\times 100
]

Here, total cost includes the entered base cost and any additional per-item costs.

If you know the total cost per item and the profit margin you want to achieve, you can calculate the required selling price.

[
\text{Target Selling Price} =
\frac{\text{Total Cost per Item}}{1-\text{Target Margin}}
]

Use the target margin as a decimal in the formula. For example, 30% is entered as 0.30.

Suppose your total cost per item is $65 and you want a 30% profit margin:

[
\text{Target Selling Price} =
\frac{65}{1-0.30} = 92.86
]

You would need to charge approximately $92.86 per item to achieve a 30% margin, based on the costs entered.

The cost of a product is not always limited to its purchase or production price. Additional expenses per item can include packaging, handling, or other costs that you choose to include.

For example, suppose:

Without the extra $5 cost, the profit would be $20 and the margin would be 25%. Including the additional cost reduces the profit margin to 18.75%.

This shows why including relevant costs is important when evaluating a product's profitability.

The calculator provides several measurements to help you assess your pricing and profitability.

Profit per item: Selling price minus total cost per item.

Total profit: Profit per item multiplied by the quantity.

Total revenue: Selling price multiplied by the quantity.

Total costs: Total cost per item multiplied by the quantity.

Profit margin: Profit expressed as a percentage of selling revenue.

Markup: Profit expressed as a percentage of total cost.

Break-even price: The price per item at which revenue equals the costs included in the calculation. At this price, profit is zero.

A selling price below the break-even price results in a loss based on the costs entered. A price equal to the break-even price produces neither a profit nor a loss.

A profit margin calculator can help with everyday business decisions, including:

Setting product prices: Estimate the selling price needed to achieve your desired margin.

Evaluating product profitability: Check whether a product generates enough profit after relevant costs.

Comparing products: Compare margins and markups across different products or services.

Planning sales: Estimate total revenue, costs, and profit for a planned quantity.

Reviewing price changes: Understand how changing costs or selling prices affects profitability.