Profit margin calculator

Margin vs. markup

Margin is profit as a share of the price: (price − cost) ÷ price. Markup is profit as a share of the cost: (price − cost) ÷ cost. They describe the same profit from different starting points, which is why they're easy to mix up. Something that costs $60 and sells for $100 has a 40% margin but a 66.7% markup.

Why it matters: if you want a 40% margin and you add 40% to your cost, you'll actually end up with a margin of about 28.6%. To price for a target margin, divide cost by (1 − margin). That's what the second box does.

What counts as “cost”?

For a product, start with what you pay for it plus shipping. For a service job, include materials and any contractor or helper pay directly tied to the job. Your overhead (rent, software, insurance) isn't usually included here, but your margin has to be large enough to cover it.

See your real margins

When your income and costs are categorized, your profit and loss report shows your actual margin across the whole business, month by month. Apsis keeps that report current automatically from your bank feed.