Profit Margin & Markup Calculator

Margin vs. markup — the difference that trips everyone up

Margin and markup both describe your profit, but they divide it by different things, and mixing them up quietly eats your earnings. Margin is profit as a share of the price you charge. Markup is profit as a share of the cost to you. The same job can be "a 50% markup" and "a 33% margin" at the same time — so if a client or a supplier says "50%", always ask which one they mean. For the full story with more worked examples, see our guide: margin vs. markup, explained.

How to use this calculator

• Section 1 takes a cost and a price you're considering and tells you the profit, the margin, and the markup — so you can sanity-check a quote.
• Section 2 works the other way: tell it your cost and the margin you want to keep, and it tells you the price you need to charge to get there.

A worked example

Suppose a project costs you $40 in time and tools, and you're thinking of charging $100. That's $60 profit — a 60% margin but a 150% markup. Now flip it: if a job costs $30 and you want to keep a 40% margin, you need to charge $30 ÷ (1 − 0.40) = $50. Notice you can't just add "40%" to the cost — that would only give you a 28.6% margin. This is exactly the trap the second section saves you from.

Why margins matter for freelancers

Your margin is your breathing room — it's what absorbs scope creep, slow months, and the costs you forgot to count. Thin margins mean every surprise comes straight out of your pocket. Pricing to a deliberate target margin — see how to price a project — rather than guessing, is one of the simplest ways to make freelancing sustainable.

Who this calculator is for

Anyone who has a cost and a price and needs to know what's left in between: freelancers quoting fixed-price projects, makers and resellers pricing physical products, agencies sanity-checking subcontracted work, and side hustlers trying to figure out whether a $25 product that costs $19 to make and ship is actually worth the effort (that's a 24% margin — tight). If you've ever added "a bit on top" of your costs and hoped for the best, this page is for you.

Assumptions and limitations

The results are per-sale gross margin, not your business's net profit. A few things to keep in mind when you read the numbers:

• Your cost must be fully loaded. Include your own time (at your real hourly rate), subcontractors, software, transaction fees and shipping — not just materials. A "60% margin" that ignores ten hours of your labour isn't a 60% margin.
• Figures are pre-tax and exclude VAT/sales tax. Quote and compare prices net of the tax you collect for the government, since that money was never yours.
• Target margin must stay below 100%. Price = cost ÷ (1 − margin) grows without bound as the target approaches 100% — the calculator caps the target at 99.9% for that reason.
• Overheads spread across many jobs aren't modelled. Rent, insurance and annual software belong in your rate or your yearly planning, not in a single job's cost line — unless the job genuinely consumes them.

Frequently asked questions