Enter your cost and selling price to instantly calculate gross profit and margin percentage. Know your numbers before you price anything.
Calculate gross profit and margin percentage from your cost and selling price.
Profit margin is the percentage of revenue that remains as profit after subtracting costs. It is calculated as: Margin % = (Selling Price − Cost) ÷ Selling Price × 100. A product that costs $60 and sells for $100 has a gross profit of $40 and a margin of 40%.
Gross profit margin only accounts for the direct cost of goods (COGS). Net profit margin subtracts all operating expenses, taxes, and interest — giving a more complete picture of profitability. Use this calculator for gross margin; for net margin, you'll need to factor in overheads separately.
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. For the same $60 cost / $100 selling price example: margin = 40%, markup = 66.7%. Confusing them is one of the most common pricing errors — a 40% markup does NOT produce a 40% margin. Read the full markup vs margin guide →
There is no universal answer — it depends heavily on industry. Retail typically runs 20–50% gross margin. SaaS and software can reach 70–80%. Service businesses often target 50–70%. Physical goods with high manufacturing costs may see 10–30%. The right margin is one that covers all your operating costs and leaves sufficient net profit after taxes and overheads.
Profit Margin % = (Selling Price - Cost) ÷ Selling Price × 100. For example: selling price $150, cost $90 → Profit $60 → Margin = 60 ÷ 150 × 100 = 40%.
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. A 40% markup does NOT equal a 40% margin. A $60 cost with 40% markup = $84 selling price = 28.6% margin.
It varies by industry. Retail: 20-50%. Services: 50-70%. SaaS/software: 70-85%. Restaurants: 3-9% net margin. The key is that your margin must cover operating costs, taxes, and still leave a viable net profit.
Payment fees (PayPal 2.9%, Stripe 2.9%) directly reduce your realized selling price. On a $100 sale with a 40% margin, a 3% payment fee reduces net margin to roughly 37.1%. Always factor payment processing costs into your cost structure.