Margin Calculator
Calculate gross margin, markup, cost, and revenue from any two known values.
| Metric | Value | Description |
|---|---|---|
| Cost | — | What you pay |
| Revenue | — | What you charge |
| Gross Profit | — | Revenue − Cost |
| Gross Margin % | — | Profit ÷ Revenue |
| Markup % | — | Profit ÷ Cost |
| Profit Multiplier | — | Revenue ÷ Cost |
Calculate gross margin percentage, markup percentage, cost, or revenue from any two known values in a pricing calculation.
How Margin Calculator Works
Gross margin expresses profit as a percentage of the selling price: Margin % = (Revenue − Cost) ÷ Revenue × 100. Markup instead expresses that same profit as a percentage of the cost: Markup % = (Revenue − Cost) ÷ Cost × 100 — the same dollar profit produces two different percentages depending on which base you divide by, which is a common source of pricing confusion.
Because margin and markup describe the same profit from two different denominators, a markup will always be numerically larger than the corresponding margin (except at 0%). The calculator also solves in reverse — if you know your target margin and cost, it computes the revenue you need to charge, or if you know your target margin and revenue, it computes the maximum cost you can afford.
The profit multiplier (Revenue ÷ Cost) is shown alongside the percentages as a quick reference — a multiplier of 1.25×, for instance, corresponds to a 25% markup and a 20% margin on the same transaction.
See It In Action
Who Uses Margin Calculator and Why
- Figuring out the gross margin percentage on a product given its cost and selling price.
- Converting a target margin into the markup percentage needed to hit it when setting a retail price.
- Solving for the price you need to charge to hit a specific margin on a known cost.
- Solving for the maximum cost you can afford to pay a supplier to still hit a target margin at a fixed selling price.
Mistakes to Avoid
- Using margin and markup interchangeably — they describe the same dollar profit but from two different denominators (revenue vs cost), and markup is always the larger percentage of the two for any given sale.
- Setting a price by adding a markup percentage directly to cost when the actual target was a margin percentage of revenue — a 20% margin needs a 25% markup, not a 20% markup, to actually hit that margin.
- Assuming a small increase in markup percentage produces a proportionally small increase in margin — near very high margins, the corresponding markup percentage grows without bound, so the two scales diverge sharply at the extremes.
Tips for Best Results
- If your team quotes pricing in markup but your finance reports track margin, use this calculator\'s conversion to make sure both sides are talking about the same actual profit.
- Use "Solve for Revenue" whenever you know your cost and want to hit a specific margin target, rather than guessing at a markup percentage and checking the resulting margin afterward.
Fixing Common Problems
My markup percentage looks much higher than my margin percentage for the same sale. — That\'s normal and expected — markup divides profit by cost while margin divides the same profit by the larger revenue figure, so markup is mathematically always higher than margin except at 0%.
Terms Explained
Gross margin: Profit expressed as a percentage of the selling price: (Revenue − Cost) ÷ Revenue.
Markup: The same profit expressed as a percentage of the cost instead: (Revenue − Cost) ÷ Cost.