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Pricing & Margin Calculator

Set your cost and target margin or markup — instantly get the right selling price, gross profit, and the equivalent percentage. Or reverse-calculate from a selling price to see what margin and markup you're earning.

Free Tool · Margin → Price · Markup → Price · Reverse Calc · Multi-Item Table
Calculation Mode
$ per unit

Enter your total unit cost — materials, labor, packaging, shipping. Do not include fixed overhead unless calculating full-absorption cost.

% margin

Margin = Profit ÷ Selling Price. A 40% margin means 40¢ of every $1 sold is profit. Formula: Price = Cost ÷ (1 − Margin)

Optional — Quantity & Tax
# units

Enter an expected quantity to see total revenue and total gross profit projections.

%

Tax is added on top of the selling price. Your margin calculation is based on the pre-tax selling price.

Results

Enter cost & target
then hit Calculate

Industry Margin Benchmarks

Click a benchmark to pre-fill the target margin in the calculator above.

Multi-Item Pricing Table

Price multiple products at once. Each row gets its own selling price, margin, and markup based on cost and target margin.

Item / SKU Cost ($) Target Margin % Sell Price Profit $ Markup %
Total Revenue
$0
Total COGS
$0
Total Gross Profit
$0

Margin vs. Markup — The Key Difference

Margin and markup are not interchangeable. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of cost. The same transaction has two different percentages — and confusing them is one of the most common small business pricing mistakes. A 50% markup is only a 33% margin. If you tell a salesperson to apply a "40% markup" when you meant "40% margin," you will earn significantly less than planned.

1 Margin Formula

Margin divides profit by the selling price. It tells you what fraction of every sale dollar you keep. Use margin when analyzing profitability or comparing against industry benchmarks.

Margin = (Price − Cost) ÷ Price To get Price from Margin: Price = Cost ÷ (1 − Margin) Example: Cost = $50, Margin = 40% Price = $50 ÷ 0.60 = $83.33 Profit = $33.33

2 Markup Formula

Markup divides profit by the cost. It tells you how much you increased the price above what you paid. Use markup when setting prices from a cost-based pricing model.

Markup = (Price − Cost) ÷ Cost To get Price from Markup: Price = Cost × (1 + Markup) Example: Cost = $50, Markup = 67% Price = $50 × 1.67 = $83.50 Profit = $33.50

3 Converting Between Them

Every margin has an equivalent markup and vice versa. Use these formulas to convert between the two without recalculating from scratch.

Markup → Margin: Margin = Markup ÷ (1 + Markup) Margin → Markup: Markup = Margin ÷ (1 − Margin) Quick reference: 20% margin = 25% markup 33% margin = 50% markup 50% margin = 100% markup

4 Gross vs. Net Margin

Gross margin only deducts COGS — not overhead, rent, or salaries. Net margin deducts all expenses. This calculator computes gross margin. Your net margin will always be lower. Target gross margin high enough to cover overhead and still leave net profit.

Gross Margin = (Revenue − COGS) ÷ Revenue Net Margin = Net Income ÷ Revenue Gross margin target ≥ Your overhead % + desired net profit %
Common Pricing Mistakes to Avoid

1. Confusing margin and markup — a 50% markup is a 33% margin, not 50%. Always clarify which percentage you're using.

2. Forgetting overhead in COGS — if you only include raw materials but not labor, packaging, or shipping, your margin looks higher than it actually is.

3. Using gross margin to estimate profit — gross margin doesn't include rent, salaries, or marketing. A 40% gross margin with 35% overhead = only 5% net profit.

4. Setting prices without knowing your break-even — divide your total monthly fixed costs by your gross margin to find the revenue you need to break even.

Frequently Asked Questions

Margin (gross profit margin) is profit expressed as a percentage of the selling price. Markup is profit expressed as a percentage of the cost. For the same transaction, markup is always a larger number than margin. For example, if you buy a product for $60 and sell it for $100, your profit is $40. Your margin is $40 ÷ $100 = 40%. Your markup is $40 ÷ $60 = 66.7%. Confusing them is one of the most expensive small business mistakes — if you apply a 40% markup instead of aiming for a 40% margin, you earn a 28.6% margin instead, which could be the difference between profitability and loss.
It depends heavily on the industry. Grocery and supermarket retail typically operate at 1–3% net margin. Restaurants average 3–9% net margin with gross margins of 60–70% on food. Software (SaaS) companies often achieve 60–80% gross margins. Freelancers and consultants can target 50–70% gross margins. Manufacturing typically sees 20–35% gross margins. A good rule of thumb: target a gross margin high enough that after paying all overhead and fixed costs, you still have 10–20% net profit. If your monthly overhead is 30% of revenue, you need at least a 40–50% gross margin to stay in the green.
Use the formula: Selling Price = Cost ÷ (1 − Target Margin). For example, if your cost is $40 and you want a 35% margin: Price = $40 ÷ (1 − 0.35) = $40 ÷ 0.65 = $61.54. At $61.54, your gross profit is $21.54, which is exactly 35% of $61.54. The key insight is that you cannot simply add 35% to the cost — that gives you a 35% markup (which equals a 25.9% margin), not a 35% margin.
Use the formula: Markup = Margin ÷ (1 − Margin). For a 40% margin: Markup = 0.40 ÷ (1 − 0.40) = 0.40 ÷ 0.60 = 66.7%. For a 50% margin: Markup = 0.50 ÷ 0.50 = 100%. Quick reference — 20% margin = 25% markup; 33% margin = 50% markup; 50% margin = 100% markup; 60% margin = 150% markup; 75% margin = 300% markup. The conversion box in this calculator shows the equivalent number automatically whenever you calculate a result.

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For planning and educational purposes. Margin and markup figures are based on gross profit only and do not include operating expenses, taxes, or overhead. Consult an accountant for full P&L analysis. © TWC Industrial

Pricing & Margin Calculator · Free to Use

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