Profit Margin Calculator
Enter what something cost you and what you charged. Get the profit, the margin, and the markup. The chart below converts any target margin into the markup and multiplier that produce it.
Profit margin
Profit
0
Price minus cost
Markup
0%
The same profit over cost
Cost is
0%
Share of the price
Margin to markup, converted
Find the margin you want and read across for the markup that produces it, the number to multiply cost by, and what share of the price is cost.
1% to 25% margin1% to 25% margin and the markup and multiplier that produce it.
| Target margin | Markup needed | Multiply cost by | Cost share |
|---|---|---|---|
| 1% margin | 1.01% markup | x 1.01 | 99% is cost |
| 2% margin | 2.04% markup | x 1.02 | 98% is cost |
| 3% margin | 3.09% markup | x 1.03 | 97% is cost |
| 4% margin | 4.17% markup | x 1.04 | 96% is cost |
| 5% margin | 5.26% markup | x 1.05 | 95% is cost |
| 6% margin | 6.38% markup | x 1.06 | 94% is cost |
| 7% margin | 7.53% markup | x 1.08 | 93% is cost |
| 8% margin | 8.7% markup | x 1.09 | 92% is cost |
| 9% margin | 9.89% markup | x 1.1 | 91% is cost |
| 10% margin | 11.11% markup | x 1.11 | 90% is cost |
| 11% margin | 12.36% markup | x 1.12 | 89% is cost |
| 12% margin | 13.64% markup | x 1.14 | 88% is cost |
| 13% margin | 14.94% markup | x 1.15 | 87% is cost |
| 14% margin | 16.28% markup | x 1.16 | 86% is cost |
| 15% margin | 17.65% markup | x 1.18 | 85% is cost |
| 16% margin | 19.05% markup | x 1.19 | 84% is cost |
| 17% margin | 20.48% markup | x 1.2 | 83% is cost |
| 18% margin | 21.95% markup | x 1.22 | 82% is cost |
| 19% margin | 23.46% markup | x 1.23 | 81% is cost |
| 20% margin | 25% markup | x 1.25 | 80% is cost |
| 21% margin | 26.58% markup | x 1.27 | 79% is cost |
| 22% margin | 28.21% markup | x 1.28 | 78% is cost |
| 23% margin | 29.87% markup | x 1.3 | 77% is cost |
| 24% margin | 31.58% markup | x 1.32 | 76% is cost |
| 25% margin | 33.33% markup | x 1.33 | 75% is cost |
26% to 50% margin26% to 50% margin and the markup and multiplier that produce it.
| Target margin | Markup needed | Multiply cost by | Cost share |
|---|---|---|---|
| 26% margin | 35.14% markup | x 1.35 | 74% is cost |
| 27% margin | 36.99% markup | x 1.37 | 73% is cost |
| 28% margin | 38.89% markup | x 1.39 | 72% is cost |
| 29% margin | 40.85% markup | x 1.41 | 71% is cost |
| 30% margin | 42.86% markup | x 1.43 | 70% is cost |
| 31% margin | 44.93% markup | x 1.45 | 69% is cost |
| 32% margin | 47.06% markup | x 1.47 | 68% is cost |
| 33% margin | 49.25% markup | x 1.49 | 67% is cost |
| 34% margin | 51.52% markup | x 1.52 | 66% is cost |
| 35% margin | 53.85% markup | x 1.54 | 65% is cost |
| 36% margin | 56.25% markup | x 1.56 | 64% is cost |
| 37% margin | 58.73% markup | x 1.59 | 63% is cost |
| 38% margin | 61.29% markup | x 1.61 | 62% is cost |
| 39% margin | 63.93% markup | x 1.64 | 61% is cost |
| 40% margin | 66.67% markup | x 1.67 | 60% is cost |
| 41% margin | 69.49% markup | x 1.69 | 59% is cost |
| 42% margin | 72.41% markup | x 1.72 | 58% is cost |
| 43% margin | 75.44% markup | x 1.75 | 57% is cost |
| 44% margin | 78.57% markup | x 1.79 | 56% is cost |
| 45% margin | 81.82% markup | x 1.82 | 55% is cost |
| 46% margin | 85.19% markup | x 1.85 | 54% is cost |
| 47% margin | 88.68% markup | x 1.89 | 53% is cost |
| 48% margin | 92.31% markup | x 1.92 | 52% is cost |
| 49% margin | 96.08% markup | x 1.96 | 51% is cost |
| 50% margin | 100% markup | x 2 | 50% is cost |
51% to 75% margin51% to 75% margin and the markup and multiplier that produce it.
| Target margin | Markup needed | Multiply cost by | Cost share |
|---|---|---|---|
| 51% margin | 104.08% markup | x 2.04 | 49% is cost |
| 52% margin | 108.33% markup | x 2.08 | 48% is cost |
| 53% margin | 112.77% markup | x 2.13 | 47% is cost |
| 54% margin | 117.39% markup | x 2.17 | 46% is cost |
| 55% margin | 122.22% markup | x 2.22 | 45% is cost |
| 56% margin | 127.27% markup | x 2.27 | 44% is cost |
| 57% margin | 132.56% markup | x 2.33 | 43% is cost |
| 58% margin | 138.1% markup | x 2.38 | 42% is cost |
| 59% margin | 143.9% markup | x 2.44 | 41% is cost |
| 60% margin | 150% markup | x 2.5 | 40% is cost |
| 61% margin | 156.41% markup | x 2.56 | 39% is cost |
| 62% margin | 163.16% markup | x 2.63 | 38% is cost |
| 63% margin | 170.27% markup | x 2.7 | 37% is cost |
| 64% margin | 177.78% markup | x 2.78 | 36% is cost |
| 65% margin | 185.71% markup | x 2.86 | 35% is cost |
| 66% margin | 194.12% markup | x 2.94 | 34% is cost |
| 67% margin | 203.03% markup | x 3.03 | 33% is cost |
| 68% margin | 212.5% markup | x 3.13 | 32% is cost |
| 69% margin | 222.58% markup | x 3.23 | 31% is cost |
| 70% margin | 233.33% markup | x 3.33 | 30% is cost |
| 71% margin | 244.83% markup | x 3.45 | 29% is cost |
| 72% margin | 257.14% markup | x 3.57 | 28% is cost |
| 73% margin | 270.37% markup | x 3.7 | 27% is cost |
| 74% margin | 284.62% markup | x 3.85 | 26% is cost |
| 75% margin | 300% markup | x 4 | 25% is cost |
76% to 95% margin76% to 95% margin and the markup and multiplier that produce it.
| Target margin | Markup needed | Multiply cost by | Cost share |
|---|---|---|---|
| 76% margin | 316.67% markup | x 4.17 | 24% is cost |
| 77% margin | 334.78% markup | x 4.35 | 23% is cost |
| 78% margin | 354.55% markup | x 4.55 | 22% is cost |
| 79% margin | 376.19% markup | x 4.76 | 21% is cost |
| 80% margin | 400% markup | x 5 | 20% is cost |
| 81% margin | 426.32% markup | x 5.26 | 19% is cost |
| 82% margin | 455.56% markup | x 5.56 | 18% is cost |
| 83% margin | 488.24% markup | x 5.88 | 17% is cost |
| 84% margin | 525% markup | x 6.25 | 16% is cost |
| 85% margin | 566.67% markup | x 6.67 | 15% is cost |
| 86% margin | 614.29% markup | x 7.14 | 14% is cost |
| 87% margin | 669.23% markup | x 7.69 | 13% is cost |
| 88% margin | 733.33% markup | x 8.33 | 12% is cost |
| 89% margin | 809.09% markup | x 9.09 | 11% is cost |
| 90% margin | 900% markup | x 10 | 10% is cost |
| 91% margin | 1011.11% markup | x 11.11 | 9% is cost |
| 92% margin | 1150% markup | x 12.5 | 8% is cost |
| 93% margin | 1328.57% markup | x 14.29 | 7% is cost |
| 94% margin | 1566.67% markup | x 16.67 | 6% is cost |
| 95% margin | 1900% markup | x 20 | 5% is cost |
Margin and markup are not the same number
Both describe the same profit. Margin measures it against the price, markup against the cost. Cost 100, price 150: that is a 50% markup and a 33.3% margin, from one transaction.
The confusion is expensive in one specific direction. Someone asked for a 40% margin applies a 40% markup, sells at 140 instead of 167, and hands over a sixth of the revenue without noticing.
The rule to remember: to hit a margin, divide the cost by 1 minus the margin. A 40% margin on a cost of 60 is 60 divided by 0.6, which is 100. The chart above does this for every margin from 1% to 95%.
On service work, cost means hours
For a shop, cost is what the stock cost. For an agency, a studio or a consultancy, cost is almost entirely people's time, and that is a much slipperier number.
It is slippery because it is only as good as the record. A job quoted at 40 hours that quietly took 55 still shows the quoted margin on the invoice. Nothing on the paperwork says otherwise, and the 15 extra hours come straight out of the profit.
This is why quoted margins and real margins drift apart across a year, and why the drift is always in the same direction. Nobody forgets to log the hours that made a job faster than expected.
Getting the cost number honest
A margin calculation is only as trustworthy as the cost you feed it. If the hours come from memory at the end of the month, the margin is a guess dressed up as arithmetic.
Recording hours against the job as the work happens is what makes the number real. Reports compare hours logged against what was quoted, per project, so the drift shows up while the job is still running.
To set a rate that carries the margin you want, the billable rate calculator works backwards from cost and target profit, and the labor cost calculator gets the true hourly cost of an employee.
Frequently asked questions
Common queries and answers about the profit margin calculator.
- How do I calculate profit margin?
- Take the cost away from the price, then divide by the price and multiply by 100. A job costing 60 sold for 100 has a 40% margin.
- What is the difference between margin and markup?
- Margin is profit as a share of the price. Markup is the same profit as a share of the cost. A 50% markup is only a 33.3% margin.
- What markup do I need for a 50% margin?
- 100% markup. To hit a 50% margin you double the cost, because half the price has to be profit.
- What markup do I need for a 40% margin?
- 66.67% markup, which is multiplying the cost by 1.67. This is the pair people mix up most often.
- What margin does a 50% markup give?
- 33.33%. Cost 100 becomes price 150, and 50 profit out of 150 is a third.
- What is a good profit margin?
- It depends entirely on the trade. Agencies and consultancies often target 20% to 40% net, while retail runs far thinner. Compare against your own past jobs, not an industry average.
- Why can margin never reach 100%?
- A 100% margin would mean the cost was zero. As the target margin climbs, the markup needed climbs much faster, which is why the chart stops at 95%.
- How do I work out the price from a target margin?
- Divide the cost by 1 minus the margin as a decimal. For a 40% margin on a cost of 60, that is 60 divided by 0.6, so 100.
- Is margin worked out before or after tax?
- Gross margin uses direct costs only. Net margin takes off overheads and tax as well, so it is always the smaller of the two.
- Why is my real margin lower than my quoted one?
- Usually unrecorded hours. If a job was quoted on 40 hours and took 55, the extra 15 came straight out of the margin and nothing on the invoice shows it.
Tired of doing this by hand?
TimeTracker captures every hour automatically and turns it into timesheets, invoices, and live profitability.