Profit Margin Calculator
Calculate gross profit margin, net profit margin, and markup percentage from cost price and revenue. Supports reverse calculation to find selling price from target margin.
✓ Runs in your browser · Updated 2026-03-31Enter values and click Calculate Margin to see results
What Is Profit Margin?
Profit margin measures how much of every rupee in revenue a business keeps as profit. It is one of the most important financial metrics for evaluating business performance and pricing strategy.
Gross Margin vs Net Margin
Gross margin considers only direct costs (cost of goods sold), while net margin accounts for all operating expenses, taxes, and overheads. A healthy business typically has a strong gross margin and a reasonable net margin.
Gross Profit = Revenue − Cost Price
Gross Margin = (Gross Profit / Revenue) × 100
Net Profit = Revenue − Cost Price − Expenses
Net Margin = (Net Profit / Revenue) × 100
Margin vs Markup
Margin is calculated as a percentage of selling price, while markup is calculated as a percentage of cost price. For example, a 50% markup on ₹100 cost gives a selling price of ₹150, but the margin is only 33.3%.
Markup = (Gross Profit / Cost Price) × 100
Benchmark Margins by Industry
Average profit margins vary significantly by industry. Retail businesses often have margins of 2–5%, while software companies may see margins above 60%. Understanding your industry benchmark helps you set competitive prices.
Related Tools
- Markup Calculator – Convert between markup and margin
- ROI Calculator – Calculate return on investment
- Operating Margin Calculator – Calculate EBIT margin
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a percentage of selling price: (Selling − Cost) / Selling × 100. Markup is profit as a percentage of cost: (Selling − Cost) / Cost × 100. A 50% markup equals a 33.3% margin.
What is a good profit margin?
It varies by industry. Retail: 2-5% net margin. Software: 15-25%. Manufacturing: 5-10%. A gross margin above 50% is generally considered healthy for most businesses.