Profit Margin Calculator
Instantly calculate your profit, profit margin percentage, and markup percentage. Understand the difference between margin (profit as a % of revenue) and markup (profit as a % of cost) — two metrics that look similar but mean very different things in pricing strategy.
Frequently Asked Questions
What is the difference between profit margin and markup?+
Profit margin is profit divided by revenue (selling price). Markup is profit divided by cost. For example, if you buy at ₹60 and sell at ₹100: margin = 40%, markup = 66.7%. Margin is how much of every rupee earned you keep; markup is how much above cost you charge.
What is a good profit margin?+
It varies widely by industry. Retail typically runs 2–10%, software/SaaS 60–80%, restaurants 3–9%, manufacturing 5–20%. A healthy margin is one that covers fixed overheads and leaves room for reinvestment after variable costs.
How do I calculate selling price from cost and desired margin?+
Selling Price = Cost ÷ (1 − Desired Margin). For a 40% margin on a ₹60 cost: ₹60 ÷ 0.60 = ₹100. Note: this is different from applying a 40% markup (₹60 × 1.40 = ₹84), which only gives a 28.6% margin.
Does this calculator account for indirect costs like rent and salaries?+
This calculator computes gross profit margin — it uses the cost you enter as COGS (direct costs). To compute net profit margin, include all fixed overheads (rent, salaries, marketing) in the cost field.