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Margin Calculator

Margin Calculator - a browser-based calculators utility.

Browser tool

About Margin Calculator

Margin and markup are calculated from the same two numbers and answer different questions, and mixing them up is one of the more expensive arithmetic mistakes in small business. This gives both from cost and revenue, and solves in either direction. A free calculator that opens online with nothing to register. Your figures are handled in the browser alone.

How to use it

  1. Enter cost and revenueMargin, markup and profit all follow from those two figures.
  2. Or set the margin you needGive a cost and a target margin and the calculator returns the price to charge, which is the direction most pricing decisions actually run.

Margin and markup are not the same number

Margin is profit as a share of the selling price; markup is profit as a share of the cost. An item costing 60 and selling for 100 has a 40% margin and a 66.67% markup. Both describe the same 40 of profit. Pricing at "40% markup" when you meant a 40% margin leaves you charging 84 instead of 100.

What it does not do

  • This is gross margin: revenue minus the direct cost of the item. It does not account for overheads, payment fees, returns or tax, all of which sit between gross margin and money in the bank.
  • Margin is undefined when revenue is zero, and negative when cost exceeds revenue. Both are reported as such rather than hidden.

Questions people ask

Should I price on margin or markup?
Margin, generally, because it tells you what share of each sale you keep and is directly comparable across products with different costs. Markup is more convenient when you price by applying a standard multiplier to cost.
Can margin be more than 100%?
No. Margin is a share of the selling price, so it approaches 100% as cost approaches zero but cannot exceed it. Markup has no upper bound.

Questions about ToolsVerse itself — privacy, cost, what happens to your files — are answered in the frequently asked questions.

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