Margin calculator
Money & financeHow much margin do you make on a sale?
See the profit margin, markup and profit from cost and selling price.
What you enter stays on your device while you use this tool. Opening a shared link sends the settings in its address to HowToolbox to prepare the page.
More options
Margin
40%
Profit €40.00 per sale · markup 66.7%
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See the profit margin, markup and profit from cost and selling price.
How to use
- Enter what one unit costs you, without VAT.
- Enter the selling price, or choose Find: Price and enter the margin you want. If the price includes VAT, enter its rate under More options so it is taken out first.
- Read the margin, with the markup and the profit per sale below it. Copy the link to share the calculation.
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How it works
Margin and markup both compare your profit with a price, but with different prices. Margin divides the profit by the selling price, markup divides it by the cost. That is why the same sale always has a bigger markup than margin.
With a cost C and a selling price P without VAT, the profit is P − C, the margin is (P − C) ÷ P × 100 and the markup is (P − C) ÷ C × 100. A price that includes VAT is first divided by (1 + VAT rate), because VAT goes to the state, not to you. The definitions follow OpenStax, Contemporary Mathematics, section 6.2.
This is the gross margin of one unit. Overheads, discounts, shipping and income tax are not included. A negative result means you sell at a loss.
Worked example
What is the margin on a €100.00 sale with €60.00 cost and no VAT?
- €100.00 − €60.00 = €40.00.
- €40.00 ÷ €100.00 × 100 = 40%.
40%
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price, markup is profit as a share of the cost. A €40 profit on a €100 price is a 40% margin, but a 66.7% markup on the €60 cost.
Should I enter prices with or without VAT?
Enter the cost without VAT. For the selling price, enter what the customer pays and the VAT rate it includes, or the net price with VAT at 0%.
Can the margin be over 100%?
No. Margin stays below 100% because the profit is always less than the price. Markup has no upper limit: selling at three times the cost is a 200% markup.
How do I turn a markup into a margin?
Margin = markup ÷ (100 + markup) × 100. A 50% markup is a 33.3% margin.
Can the result show a loss?
Yes. If the selling price without VAT is below cost, profit, margin and markup are negative.
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