How to use this calculator
Enter the cost and selling price for the same unit in the same currency. Include the costs you intend to treat as cost of goods sold. Compare the two percentages carefully: they use different denominators.
The formula
A worked example
A product costing $60 and selling for $100 earns $40 gross profit. Its margin is 40% of sales; its markup is 66.67% of cost.
Assumptions & limitations
Calculates per-unit gross figures, not net profit. It excludes overhead, financing, and taxes unless already included in your entered cost. Both price and cost must be positive for the displayed percentages.
Common questions
Why is markup higher than margin?
For a profitable sale, the same profit is divided by a smaller cost base when calculating markup.
Can the result be negative?
Yes. If selling price is below cost, both gross profit and the percentages are negative.
Supporting reference
The method above states this calculator’s assumptions. This reference provides related definitions and technical context.
Business Queensland: break-even and gross profit ↗Formula and worked example checked against automated test cases. About our methodology.