Profit Margin Calculator

Profit margin is profit divided by revenue, where profit is revenue minus costs.

Inputs Runs in your browser; no account, login, or saved personal data.

Quick answer

Profit margin is profit divided by revenue, where profit is revenue minus costs. With the default inputs (Revenue $120,000, Costs $78,000, Target margin 30%) the result is Gross profit $42,000, Current margin 35%, Revenue for target $111,429.

Method

Gross profit = revenue - costs. Current margin = gross profit / revenue x 100. Revenue for target = costs / (1 - target margin / 100).

Margin is a share of revenue, while markup is a share of cost; a 30% margin is a 42.9% markup, so do not mix the two when setting prices.

Worked example

Revenue$120,000
Costs$78,000
Target margin30%
Gross profit$42,000
Current margin35%
Revenue for target$111,429

Assumptions and limits

  • "Costs" should include every cost you want the margin to reflect; the tool does not separate cost of goods from operating expenses.
  • A target margin of 100% or more has no solution in this formula, and the tool shows 0 for that field.

Educational estimate only. It is not financial, tax, legal, or investment advice.

FAQ

How do I calculate profit margin?

Subtract costs from revenue, divide by revenue and multiply by 100. With the defaults ($120,000 revenue, $78,000 costs) the margin is 35%.

What revenue do I need for a target margin?

Divide costs by (1 - target margin). With the defaults and a 30%% target you need $111,429.

What is the difference between margin and markup?

Margin is profit as a percentage of revenue; markup is profit as a percentage of cost. The same price gives a higher markup than margin.

What is gross profit here?

Revenue minus the costs you entered. With the defaults it is $42,000.

Is my data stored?

No. The calculation runs in your browser and the inputs are not sent to or saved by this site.