PROFIT MARGIN
0%
Enter the selling price and cost price to calculate.
This calculator gives a simple profit margin estimate based on the figures entered.
How to calculate profit margin
Profit margin shows how much profit is made as a percentage of the selling price. It is commonly used by businesses to understand pricing, costs and profitability.
Example: selling price £100 and cost price £60
Profit = £100 – £60 = £40
Profit margin = £40 ÷ £100 × 100 = 40%
What this calculator is for
This profit margin calculator helps estimate gross profit and profit margin from a selling price and cost price. It can be useful for small businesses, freelancers, shops, online sellers, tradespeople, service providers and anyone checking pricing decisions.
The calculator uses the selling price as the basis for margin. This is different from markup, which compares profit with the cost price.
Profit margin formula
A simple profit margin formula is:
Profit margin = profit ÷ selling price × 100
Where:
Profit = selling price – cost price
Important note
This calculator is for general informational purposes only. It does not include VAT, tax, fees, delivery costs, staff costs, overheads or other business expenses unless you include them in the cost price.
Frequently Asked Questions
What is profit margin?
Profit margin is the percentage of the selling price that remains as profit after the cost price has been deducted.
How is profit margin calculated?
Profit margin is calculated by subtracting cost price from selling price, then dividing the profit by the selling price and multiplying by 100.
What is the difference between margin and markup?
Profit margin compares profit with the selling price. Markup compares profit with the cost price.
Can profit margin be negative?
Yes. If the cost price is higher than the selling price, the result is a loss and the profit margin will be negative.
Does this include VAT or tax?
No. This calculator uses the figures entered and does not automatically include VAT, tax, fees or overheads.