Calculate your profit margin percentage, or find the selling price needed to hit a target margin.
Margin % = [(Selling Price − Cost) ÷ Selling Price] × 100
Margin is always calculated on the selling price, not the cost — this is what distinguishes it from markup. A higher selling price relative to cost produces a higher margin percentage.
Margin is profit as a percentage of the selling price (Profit ÷ Selling Price). Markup is profit as a percentage of the cost price (Profit ÷ Cost). A 50% markup on cost is not the same as a 50% margin on selling price — they're calculated on different bases, so don't use them interchangeably.
Selling Price = Cost ÷ (1 − Desired Margin %). For example, to achieve a 30% margin on a ₹700 cost item: ₹700 ÷ (1 − 0.30) = ₹1,000.
Because margin is calculated on the (larger) selling price while markup is calculated on the (smaller) cost. A 50% margin actually requires a 100% markup on cost — this is one of the most common pricing mistakes business owners make.
This depends heavily on your industry, competition, and cost structure. Retail commonly targets 20-50% margins, while services and software can target much higher margins given lower marginal costs. Research your specific industry's typical range.
Margin tells you what portion of each sale is actual profit — a critical number for assessing whether your pricing covers costs and generates a sustainable return. This calculator also shows the equivalent markup percentage so you can see how the two relate.
If you're starting from cost and want to find the right selling price, try our Markup Calculator or Pricing Calculator instead.
