Margin Calculator
Choose what you want to calculate, enter the known values, then click Calculate.
What do you want to calculate?
To calculate margin, enter Cost and Revenue.
The selected result field is locked automatically. Enter the known values only.
Result
| Item | Value |
|---|
Margin Formula Table
| Requirement | Formula | Inputs Needed |
|---|---|---|
| Calculate Profit | Profit = Revenue − Cost | Revenue and Cost |
| Calculate Margin | Margin (%) = 100 × Profit ÷ Revenue | Revenue and Cost |
| Calculate Revenue from Margin | Revenue = Cost ÷ (1 − Margin ÷ 100) | Cost and Margin |
| Calculate Revenue from Profit | Revenue = Cost + Profit | Cost and Profit |
| Calculate Cost from Margin | Cost = Revenue × (1 − Margin ÷ 100) | Revenue and Margin |
| Calculate Cost from Profit | Cost = Revenue − Profit | Revenue and Profit |
Margin is based on revenue, not cost. If you want profit as a percentage of cost, that is markup, not margin.
Use this Margin Calculator to calculate profit margin, revenue, cost, or profit from any two known values. Enter cost, margin, revenue, or profit, and the calculator estimates the missing values using standard gross margin formulas.
Important Note: This Margin Calculator estimates cost, revenue, profit, and margin percentage from any two known values. It uses standard gross margin relationships where profit equals revenue minus cost, and margin equals profit divided by revenue.
This calculator is best understood as a gross margin or simple profit margin tool. It does not automatically include overhead, payroll, rent, taxes, VAT/GST, shipping, payment processing fees, platform fees, advertising, discounts, refunds, returns, inventory loss, financing costs, or other operating expenses unless you manually include them in the cost value.
Use this calculator for quick pricing checks, target selling-price estimates, product margin review, and business planning. For official accounting, tax reporting, financial statements, investor reporting, or final pricing decisions, review your full cost structure and consult a qualified accountant or financial professional when needed.
Reviewed by: AjaxCalculators Editorial Team
Last updated: April 26, 2026
Method source: Standard gross profit margin relationships using cost, revenue, profit, and margin percentage
Editorial standards: AjaxCalculators Editorial Policy
What This Margin Calculator Calculates
This calculator estimates the missing values from cost, revenue, profit, and margin. Enter any two known values, and the tool updates the remaining fields automatically.
| Input or Result | What It Means | Use Note |
|---|---|---|
| Cost | The amount spent to produce, buy, or deliver the product or service. | Include all relevant costs if you want the margin result to reflect broader profitability. |
| Revenue | The selling price or income received from the sale. | Use the same currency as cost and profit. |
| Profit | The amount left after subtracting cost from revenue. | Calculated as revenue minus cost. |
| Margin percentage | Profit shown as a percentage of revenue. | Margin is based on revenue, not cost. |
| Currency selector | Changes the displayed currency symbol. | It does not convert exchange rates. |
What Profit Margin Means
Profit margin shows what percentage of revenue remains as profit after cost is subtracted. In this calculator, margin is based on revenue.
| Term | Formula | Example With $100 Revenue and $60 Cost |
|---|---|---|
| Profit | Revenue − Cost | $100 − $60 = $40 |
| Margin | Profit ÷ Revenue × 100 | $40 ÷ $100 × 100 = 40% |
| Markup | Profit ÷ Cost × 100 | $40 ÷ $60 × 100 = 66.67% |
This is why margin and markup are not interchangeable. The same $40 profit gives a 40% margin but a 66.67% markup.
How the Margin Calculator Works
The calculator uses standard relationships between cost, revenue, profit, and margin percentage.
| Calculation | Formula | Example |
|---|---|---|
| Profit from revenue and cost | Profit = Revenue − Cost | 150 − 90 = 60 |
| Margin from profit and revenue | Margin = Profit ÷ Revenue × 100 | 60 ÷ 150 × 100 = 40% |
| Revenue from cost and margin | Revenue = Cost ÷ (1 − Margin ÷ 100) | 80 ÷ (1 − 0.20) = 100 |
| Cost from revenue and margin | Cost = Revenue × (1 − Margin ÷ 100) | 200 × (1 − 0.35) = 130 |
| Revenue from cost and profit | Revenue = Cost + Profit | 90 + 60 = 150 |
| Cost from revenue and profit | Cost = Revenue − Profit | 150 − 60 = 90 |
Margin vs Markup
Margin and markup both compare profit with another value, but they use different denominators.
| Metric | Formula | Based On | Use Case |
|---|---|---|---|
| Margin | Profit ÷ Revenue × 100 | Selling price or revenue | Shows what percentage of revenue remains as profit. |
| Markup | Profit ÷ Cost × 100 | Cost | Shows how much the selling price is increased above cost. |
For example, if a product costs $60 and sells for $100, profit is $40. The margin is 40%, but the markup is 66.67%. Confusing markup with margin can cause pricing errors.
Gross Margin vs Net Margin
This calculator is best treated as a gross margin calculator unless you manually include all expenses in the cost field. Gross margin and net margin answer different profitability questions.
| Margin Type | What It Usually Includes | What It Usually Excludes | Best Use |
|---|---|---|---|
| Gross margin | Revenue and direct cost or cost of goods sold. | Overhead, rent, payroll, taxes, interest, advertising, software, and administrative expenses. | Checking product, service, or sale-level profitability before overhead. |
| Operating margin | Revenue minus operating costs. | Often excludes interest, taxes, and non-operating items. | Reviewing business operations after normal operating expenses. |
| Net margin | Revenue after all expenses included in net profit. | Nothing material should be excluded if true net profit is used. | Understanding bottom-line profitability. |
Xero explains profit margin as profit expressed as a percentage of revenue, with the type of profit margin depending on which expenses are deducted.
Assumptions and Important Notes
| Assumption or Limitation | What It Means |
|---|---|
| Uses simple gross margin formulas | The calculator works from cost, revenue, profit, and margin percentage only. |
| Margin is based on revenue | It does not calculate markup unless you use the markup formula separately. |
| Same currency required | Cost, revenue, and profit should use the same currency. The currency selector changes display only. |
| No automatic overhead inclusion | Overhead, rent, payroll, software, advertising, taxes, and financing costs are not included unless entered in cost. |
| No automatic fee inclusion | Payment fees, platform fees, marketplace commissions, shipping, packaging, and fulfillment costs are not included unless added manually. |
| No tax or VAT/GST handling | The calculator does not separate tax-inclusive and tax-exclusive prices. |
| No refund or discount modeling | Returns, refunds, discounts, allowances, and chargebacks must be included manually if relevant. |
| 100% margin limitation | A 100% margin is not realistic when cost is greater than zero because revenue formula division becomes invalid. |
| Negative margin warning | A negative margin means cost is higher than revenue. |
Worked Example: Find Margin From Cost and Revenue
Suppose a product costs $70 and sells for $100.
| Step | Calculation | Result |
|---|---|---|
| Find profit | Profit = Revenue − Cost | $100 − $70 = $30 |
| Divide profit by revenue | $30 ÷ $100 | 0.30 |
| Convert to percentage | 0.30 × 100 | 30% |
So, a product with a $70 cost and $100 revenue has a $30 profit and a 30% margin.
Worked Example: Find Revenue From Cost and Target Margin
Suppose your cost is $120 and you want a 40% margin.
| Step | Calculation | Result |
|---|---|---|
| Convert margin to decimal | 40% ÷ 100 | 0.40 |
| Subtract from 1 | 1 − 0.40 | 0.60 |
| Calculate revenue | Revenue = 120 ÷ 0.60 | $200 |
| Check profit | Profit = 200 − 120 | $80 |
| Check margin | 80 ÷ 200 × 100 | 40% |
So, to earn a 40% margin on a $120 cost, the selling price or revenue should be $200.
Worked Example: Margin vs Markup
Suppose a product costs $50 and sells for $80.
| Metric | Calculation | Result |
|---|---|---|
| Profit | $80 − $50 | $30 |
| Margin | $30 ÷ $80 × 100 | 37.5% |
| Markup | $30 ÷ $50 × 100 | 60% |
The margin is 37.5%, but the markup is 60%. This difference matters when setting target selling prices.
How to Use This Margin Calculator
- Enter any two known values: cost, margin, revenue, or profit.
- Use the same currency for cost, revenue, and profit.
- Select the currency symbol you want displayed if needed.
- Review the automatically updated missing values.
- Check whether the result reflects gross margin or whether you need to include more costs.
- Use Refresh to clear the fields and start again.
The currency selector changes the displayed symbol only. It does not convert exchange rates.
How to Interpret the Result
| Result | What It Means | Important Caution |
|---|---|---|
| Cost | The amount spent to make, buy, or deliver the product or service. | If cost excludes fees or overhead, the margin may look better than real profitability. |
| Revenue | The selling price or sales income. | Use net sales after discounts, returns, or allowances if that is the number you want to analyze. |
| Profit | Revenue minus cost. | This may be gross profit, not net profit, unless all expenses are included. |
| Margin | Profit as a percentage of revenue. | Do not confuse it with markup, which uses cost as the denominator. |
| Negative margin | Cost is higher than revenue. | This usually means the sale loses money before considering other expenses. |
| Very high margin | A large percentage of revenue remains after the entered cost. | Check that all relevant costs have been included before relying on the result. |
When a Margin Calculator Is Useful
This Margin Calculator is useful for quick pricing and profitability checks.
| Use Case | How the Calculator Helps |
|---|---|
| Setting product prices | Find the selling price needed for a target margin. |
| Checking profit per sale | Calculate how much profit remains after cost. |
| Reviewing cost increases | See how higher costs affect margin if price stays the same. |
| Comparing products | Compare which product keeps more revenue as profit. |
| Estimating service margins | Check whether a service price covers labor, materials, and other entered costs. |
| Discount planning | Check whether a sale price still leaves enough profit. |
| Small business pricing | Estimate pricing scenarios before deeper accounting review. |
| Marketplace selling | Test margin after including platform fees, payment fees, shipping, and packaging in cost. |
Common Mistakes to Avoid
| Mistake | Why It Causes Problems |
|---|---|
| Confusing margin with markup | Margin uses revenue as the denominator, while markup uses cost. |
| Dividing profit by cost when trying to calculate margin | That calculates markup, not margin. |
| Forgetting hidden costs | Shipping, packaging, platform fees, payment fees, refunds, discounts, and labor can reduce real margin. |
| Assuming gross margin equals net margin | Net margin includes more expenses than a simple product-level margin. |
| Using a 100% target margin when cost is greater than zero | The revenue formula becomes impossible because it requires division by zero. |
| Comparing margins across industries without context | Different industries have different cost structures and normal margin ranges. |
| Ignoring sales volume | A high margin on low sales volume may produce less total profit than a lower margin on high volume. |
| Ignoring cash flow | Margin does not show timing of payments, inventory cost, debt service, or working-capital needs. |
| Using margin alone for business decisions | Pricing decisions should also consider demand, competitors, costs, volume, customer value, and profit goals. |
Formula Summary
| What You Want to Find | Formula | Use Note |
|---|---|---|
| Profit | Profit = Revenue − Cost | Finds the amount left after cost. |
| Margin percentage | Margin (%) = Profit ÷ Revenue × 100 | Shows profit as a percentage of revenue. |
| Revenue from cost and margin | Revenue = Cost ÷ (1 − Margin ÷ 100) | Finds the selling price needed for a target margin. |
| Cost from revenue and margin | Cost = Revenue × (1 − Margin ÷ 100) | Finds the allowed cost for a given revenue and margin. |
| Revenue from cost and profit | Revenue = Cost + Profit | Use when cost and target profit are known. |
| Cost from revenue and profit | Cost = Revenue − Profit | Use when revenue and profit are known. |
| Markup percentage | Markup (%) = Profit ÷ Cost × 100 | Useful for comparison, but markup is not the same as margin. |
When You May Need More Than This Calculator
This calculator is best for quick margin math. Some business decisions need a more complete financial model.
| Need | Better Method or Additional Check |
|---|---|
| Net profit margin | Include all operating expenses, taxes, interest, fees, and other business costs. |
| VAT/GST-inclusive pricing | Separate tax-inclusive and tax-exclusive prices before calculating margin. |
| Marketplace selling margin | Include platform commission, payment processing, fulfillment, returns, ads, and shipping subsidies. |
| Discount planning | Model the sale price, reduced revenue, and whether volume increases enough to offset lower margin. |
| Profit forecasting | Use sales volume, fixed costs, variable costs, refunds, taxes, and cash-flow timing. |
| Inventory business decisions | Include inventory holding cost, shrinkage, damaged goods, storage, and stockout risk. |
| Official accounting | Use accounting records, full expense categories, and professional guidance where needed. |
When You May Need More Than This Calculator
This calculator is best for quick margin math. Some business decisions need a more complete financial model.
| Need | Better Method or Additional Check |
|---|---|
| Net profit margin | Include all operating expenses, taxes, interest, fees, and other business costs. |
| VAT/GST-inclusive pricing | Separate tax-inclusive and tax-exclusive prices before calculating margin. |
| Marketplace selling margin | Include platform commission, payment processing, fulfillment, returns, ads, and shipping subsidies. |
| Discount planning | Model the sale price, reduced revenue, and whether volume increases enough to offset lower margin. |
| Profit forecasting | Use sales volume, fixed costs, variable costs, refunds, taxes, and cash-flow timing. |
| Inventory business decisions | Include inventory holding cost, shrinkage, damaged goods, storage, and stockout risk. |
| Official accounting | Use accounting records, full expense categories, and professional guidance where needed. |
Frequently Asked Questions
How do I calculate profit margin?
Subtract cost from revenue to find profit, then divide profit by revenue and multiply by 100. The formula is margin = profit ÷ revenue × 100.
What is the formula for profit?
The formula is profit = revenue − cost.
What is the formula for revenue from cost and margin?
The formula is revenue = cost ÷ (1 − margin ÷ 100). For example, with $80 cost and 20% margin, revenue = 80 ÷ 0.80 = $100.
What is the difference between margin and markup?
Margin is profit divided by revenue. Markup is profit divided by cost. They are related, but they are not the same percentage.
Is this a gross margin calculator or net margin calculator?
It is best treated as a gross margin or simple margin calculator. It can estimate net margin only if you manually include all relevant expenses in the cost value.
Can margin be negative?
Yes. A negative margin means cost is higher than revenue, so the sale loses money based on the values entered.
Can margin be 100%?
A 100% margin is not realistic when cost is greater than zero. A 100% margin would mean all revenue is profit and cost is zero.
Does the currency selector convert exchange rates?
No. The currency selector changes the displayed symbol only. It does not convert USD, EUR, GBP, BDT, or any other currency.
Should I include shipping and fees in cost?
Yes, if you want the margin result to reflect real profitability. Include shipping, packaging, platform fees, payment fees, labor, refunds, and other relevant costs when they apply.
Can I use this calculator for official accounting?
Use it for quick estimates only. For official accounting, tax reporting, financial statements, or pricing decisions, use full records and professional guidance when needed.
References
- OpenStax Principles of Financial Accounting — Gross Profit Margin Ratio
- Investopedia — Gross Profit Margin: Formula and What It Tells You
- Investopedia — Profit Margin vs. Markup
- Xero — What Is Profit Margin?
- Corporate Finance Institute — Gross Profit
- U.S. Chamber of Commerce — How to Calculate Small Business Profit
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Margin Calculator Disclaimer
This Margin Calculator provides educational and planning estimates only. It calculates cost, revenue, profit, and margin percentage from the values entered by the user using standard gross margin relationships.
The calculator does not automatically include overhead, payroll, rent, taxes, VAT/GST, shipping, packaging, inventory loss, payment fees, platform fees, advertising costs, discounts, refunds, returns, chargebacks, financing costs, depreciation, software costs, professional fees, or other operating expenses unless those amounts are manually included in the cost value.
This calculator does not provide accounting, tax, legal, investment, financial, or business advice. For official business reporting, tax filing, financial statements, investor reporting, pricing strategy, or major business decisions, review your full cost structure and consult a qualified accountant, tax professional, or financial professional when needed.