How to Calculate Profit Margin

A profit margin shows how much of your selling revenue remains as profit after paying the cost of a product or service. It is useful for businesses, online sellers, freelancers, and anyone who wants to understand how profitable a sale is.

Profit Margin Formula

The basic formula is: Profit Margin = (Profit ÷ Selling Price) × 100. First, subtract your cost price from your selling price to find the profit. Then divide the profit by the selling price and multiply by 100.

Profit Margin vs Markup

Profit margin and markup are not the same thing. Profit margin compares your profit with the selling price, while markup compares your profit with the original cost. This calculator shows both percentages so you can easily understand the difference.

Example

If an item costs $50 and you sell it for $80, your profit is $30. Your profit margin is 37.5%, while your markup is 60%.

You can select USD or PKR above and enter your cost price, selling price, and quantity to calculate your profit and margins instantly.