Use this free online margin calculator to find your profit margin from a cost and selling price, or to work out the selling price you need to hit a target margin. It also shows the equivalent markup percentage so you can see both figures for the same sale.
Note: Margin is profit as a percentage of the selling price, while markup is profit as a percentage of the cost price. They are different numbers for the same sale.
How to Use the Margin Calculator
Choose whether you want to find your margin or find the selling price from the "What do you want to calculate?" dropdown.
Enter the "Cost Price" of the item.
If finding the margin, enter the "Selling Price"; if finding the price, enter the "Desired Margin (%)".
Click "Calculate" to see the margin, markup, or required selling price.
Worked Examples
Finding the margin: a shop buys a pressure cooker for ₹800 and sells it for ₹1,000. Profit is ₹200. Margin = 200 ÷ 1,000 = 20%, and markup = 200 ÷ 800 = 25%.
Finding the price: you want a 30% margin on an item costing ₹700. Selling price = 700 ÷ (1 − 0.30) = ₹1,000. Check: profit of ₹300 is 30% of ₹1,000.
The common mistake: adding 30% to the cost gives 700 × 1.3 = ₹910. That is a 30% markup, but the margin is only 210 ÷ 910 = 23.08%. If your target is stated as a margin, divide by (1 − margin) rather than multiplying by (1 + margin).
Margin to Markup Conversion
Markup = margin ÷ (100 − margin) × 100. Margin is always the smaller of the two figures, and the gap widens as margins rise:
Margin
Equivalent markup
Selling price for ₹100 cost
10%
11.11%
₹111.11
20%
25%
₹125
25%
33.33%
₹133.33
30%
42.86%
₹142.86
40%
66.67%
₹166.67
50%
100%
₹200
Getting the Inputs Right
Keep GST out of both figures if you are GST-registered. The GST you collect is passed on to the government after claiming input tax credit, so it is not part of your margin. To strip GST from a tax-inclusive price, divide by 1 plus the rate; ₹1,180 at 18% is ₹1,000 before tax.
Use the full landed cost, including freight, packing, and for online sellers the marketplace commission, payment gateway and shipping fees. Leaving these out makes the margin look better than it is.
Check the effect of discounts. In the first example, a 10% festival discount brings the price to ₹900 and the margin from 20% down to 11.11%, so a small discount can cut profit nearly in half.
This is gross margin on the product. Rent, salaries and other overheads still have to be paid out of it, so net profit will be lower.
Frequently Asked Questions
Margin is calculated as ((Selling Price − Cost Price) ÷ Selling Price) × 100, which expresses your profit as a percentage of the selling price rather than the cost.
Margin is profit divided by the selling price, while markup is the same profit divided by the cost price. The calculator shows both when you find the margin, so you can see, for example, a 25% margin is actually a higher markup percentage.
When you switch to "find the selling price," it applies Selling Price = Cost Price ÷ (1 − Desired Margin ÷ 100). Because this formula divides by a value that approaches zero as the margin approaches 100%, the calculator requires the desired margin to be less than 100%.
Yes. If the selling price is below the cost, both margin and markup come out negative, showing a loss on each sale. For example, selling a ₹500 item for ₹450 gives a margin of −11.11% and a markup of −10%. This can be deliberate for clearance stock, but it should not happen by accident.
If you are registered and claim input tax credit, use prices excluding GST on both sides. If you are not registered, the GST you pay on purchases is a real cost to you, so include it in the cost price while using your actual selling price.