Profit Margin Calculator
Enter your revenue and cost to see your profit, profit margin, and markup instantly.
How to use this calculator
- 1Enter the price you charge (revenue) for the product or service.
- 2Enter what it costs you to deliver it.
- 3Read your profit, profit margin %, and markup % — updated as you type.
How the Profit Margin Calculator works
Profit margin tells you how much of every dollar you charge is actually profit once the cost of delivering the work is covered. A 40% margin means you keep $0.40 of every $1 in revenue. It is the fastest way to sanity-check pricing: when the margin is thin, a small price cut or cost rise can wipe out the profit entirely.
To lift your margin you can raise prices, reduce the cost of delivery, or move toward higher-value work. Because margin is measured against revenue it is always lower than markup, which is measured against cost — a 50% markup is only a 33% margin, so it pays to check both before quoting a client.
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Create an invoice freeFrequently asked questions
What is a good profit margin?
It varies by industry, but many small businesses and freelancers aim for 20–40%. Service businesses often run higher because their costs are lower than product businesses.
What is the difference between margin and markup?
Margin is profit as a percentage of the price (profit ÷ revenue). Markup is profit as a percentage of the cost (profit ÷ cost). Markup is always the larger number.
How do I calculate profit margin?
Subtract cost from revenue to get profit, then divide profit by revenue and multiply by 100. This tool does it instantly.
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