Profit Margin & Markup Calculator
Enter your cost and your selling price (revenue) to instantly see your profit, profit margin %, and markup %. Margin and markup are easy to mix up — this tool shows both side by side so you always price with confidence.
- Cost$0
- Revenue$0
- Profit$0
- Profit margin0%
- Markup0%
Margin vs markup — what's the difference?
This is the single most common pricing mistake. Margin and markup both come from the same profit figure, but they divide it by a different base:
- Profit margin = profit ÷ revenue — the share of your selling price that is profit.
- Markup = profit ÷ cost — how much you added on top of what it cost you.
Because the denominator is different, the two numbers are never equal. A 50% markup sounds like a 50% margin, but it isn't.
Worked example
Say a job costs you $600 and you charge $1,000. Your profit is $400.
- Margin = 400 ÷ 1000 = 40% of your price is profit.
- Markup = 400 ÷ 600 = 66.7% on top of your cost.
Same job, same profit — two very different percentages. Quote off the wrong one and you can seriously under-price your work. Not sure what to charge in the first place? See our guide on how to set your freelance rate.
What counts as a healthy margin?
- < 10%: thin — little cushion for late payments or surprises.
- 10–20%: decent for most product and reseller businesses.
- ≥ 20%: healthy; common for services and freelancers.
How to improve a thin margin
If your margin is below 10%, you have little cushion when a client pays late or a job runs over. The fastest lever is usually price: because your costs are largely fixed per job, a small price rise flows almost entirely to profit. Trim scope creep, focus on higher-value clients, and review your rates regularly rather than once a year. Use the freelance rate guide to set a number you can defend.
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FAQ
What's the difference between margin and markup?
Both start from the same profit, but use a different base. Margin is profit ÷ revenue (how much of your selling price is profit). Markup is profit ÷ cost (how much you added on top of cost). A 50% markup is only a 33% margin — they are never the same number unless profit is zero.
What's a good profit margin?
It depends on your industry, but as a rough guide: under 10% is thin, 10–20% is decent, and 20% or more is healthy. Service businesses and freelancers often run much higher margins than product resellers because their cost of delivery is mostly time.
How do I increase my profit margin?
Raise prices, reduce the cost of delivering the work, focus on higher-value clients, or cut scope creep. Even a small price increase flows almost entirely to profit, so review your rates regularly.
Is this calculator free?
Yes — completely free, no sign-up, and everything is calculated in your browser. Nothing you type is sent anywhere.