Profit, margin and markup calculator
Profit, margin and markup from revenue and costs.
Fill in the fields and the result will appear here automatically.
Profit is a subtraction anyone can do; the two percentages beside it are where deals go wrong. Margin divides profit by revenue, markup divides the same profit by cost, and the denominator is the entire difference between them. A markup of one hundred per cent is a margin of fifty, and both describe exactly the same transaction. At a cost of 100, a 40% markup gives a price of 140, while a 40% margin requires 100/0.6≈166.67. The second price is 25/21≈1.1905 times the first. Name the percentage together with its base. The profit category depends on cost scope: product costs alone give a gross result, while a net result also needs the other applicable expenses and taxes. Missing costs are not added automatically.
How it works
Formula and logic
Profit = revenue − costs. Margin = profit ÷ revenue × 100. Markup = profit ÷ costs × 100. With costs of zero there is nothing to divide by, so the markup row is omitted.
Example
Revenue of 480,000 against costs of 315,000 gives 165,000 profit, a 34.38% margin and a 52.38% markup. Revenue 100 and cost 0 give profit 100 and margin 100%; markup is omitted.
Fields and units
- Revenue — $
- Costs — $
How to use
- — Enter the revenue for the period or the deal.
- — Enter the costs that belong to that same revenue.
- — Read margin when you speak about revenue, markup when you speak about cost.
- — Keep both figures in the same currency and before or after tax consistently.
- — Define cost scope before comparing margins: gross results and results after all expenses are not the same metric.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- OpenStax, Rice University: different denominators for markup and gross margin
- Limitation
- Positive revenue and chosen nonnegative costs in one currency. The result is not net profit unless the relevant full cost scope is included.
FAQ
Which is bigger, margin or markup?
For positive revenue and cost, signed markup is at least signed margin: it is higher with a profit, both are 0% at zero profit, and signed markup remains higher for a loss. Revenue 100 and cost 200 give margin−100% and markup−50%; the margin has the greater absolute magnitude. Zero cost omits markup.
How do I turn a markup into a margin?
Margin = markup ÷ (100 + markup) × 100. A markup of 50% is a margin of 33.33%, and a markup of 100% is a margin of 50%.
Can the margin exceed one hundred per cent?
No. Profit cannot be larger than the revenue it came from, so the margin tops out at one hundred, which would mean costs of zero. Markup has no such ceiling.
Which costs should I include?
Whichever level you are measuring: only the cost of goods for gross margin, everything including salaries and rent for net margin. Mixing the two levels between periods is what makes trends meaningless.