Profit Margin Calculator
Profit margin tells you how much of each £1 of sales is profit; markup tells you how much you add on top of cost. Both matter for pricing.
Enter your revenue and cost, or use the pricing mode to find the selling price for a target margin.
How the calculation works
We believe numbers should be transparent. Here is the formula behind this calculator.
Worked example
Worked example: selling for £100 with £60 cost
Important assumptions
- Margin and markup are two different measures — do not confuse them.
- Cost should include everything directly spent to make the sale.
- For a target margin, the formula solves price from cost.
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. A 40% margin and a 66.7% markup mean the same £40 profit on a £100 sale.
How do I price to achieve a target margin?
Divide your cost by (1 − target margin). For a 40% margin on a £60 cost: £60 ÷ 0.6 = £100.
Is a high margin always good?
A high margin is usually good, but it can mean lower sales volume. The best price balances margin with what customers will actually pay.
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Read the guideThese calculations are estimates for guidance only and are not professional financial, tax or legal advice. UK rates and rules change, so always verify important figures with official GOV.UK / HMRC information or speak to a qualified professional. See our full disclaimer.