Profit Margin Calculator
Calculate your profit, profit margin, and markup from revenue and total costs.
Breakdown
See the relationship between revenue, cost, profit, margin, and markup
Use this calculator when you already know revenue and total cost and want a quick profitability check.
The calculator subtracts total cost from revenue to find profit, then expresses that profit in two different ways: profit margin and markup.
Those percentages answer different questions. Margin compares profit with revenue, while markup compares profit with cost.
Use costs from the same period or transaction as the revenue you enter. Mixing monthly revenue with per-order costs will make the percentages meaningless.
How the calculation works
This is a direct profitability calculation with no assumptions about pricing, taxes, or future sales.
Calculate profit
Total cost is subtracted from revenue.
Calculate profit margin
Profit is divided by revenue to show what share of each revenue unit remains as profit.
Calculate markup
Profit is divided by total cost to show how much profit was earned relative to cost.
Example profit margin calculation
Suppose a business generates $100 in revenue from $65 of total cost:
Profit is $35.00. Profit margin is 35.0%, while markup is about 53.8%. The two percentages differ because they use different denominators.
What each result means
Use the three outputs together to understand profitability without confusing margin and markup.
Profit
Revenue remaining after the total cost you entered.
Profit margin
Profit divided by revenue. A 35% margin means 35% of revenue remains as profit.
Markup
Profit divided by cost. It answers how much profit was earned relative to the cost base.
Profit margin questions
Common questions about interpreting margin and markup.
Is profit margin the same as markup?
No. Margin compares profit with revenue; markup compares profit with cost. The same transaction can have very different margin and markup percentages.
Can profit margin be negative?
Yes. If total cost is higher than revenue, profit and profit margin are negative.
What costs should I include?
Include the costs relevant to the profitability question you are asking. For per-order analysis, use per-order costs; for monthly analysis, use the matching monthly costs.
Does this calculate gross margin or net margin?
It calculates margin from the total cost you enter. Whether that represents gross or net margin depends on which costs you include.