How to use the Profit Margin Calculator
- Fill in Cost price and Selling price. Type a number or drag the slider.
- The result appears straight away and changes as you type. There is no button to press.
- Use the worked example, table and formula below to check the result or compare other values.
Worked example
Buying at ₹800 and selling at ₹1,000 gives a profit of ₹200. The profit margin is 20% of the selling price, and the markup is 25% on the cost.
How it is calculated
Margin % = profit ÷ selling price × 100 | Markup % = profit ÷ cost price × 100
Profit is the selling price minus the cost price. Margin compares that profit with the selling price; markup compares it with the cost. The same sale therefore has two different percentages, and markup is always the larger one.
If the selling price is below cost, the profit is negative, which means a loss.
Good to know
- Include every cost (packing, delivery, platform fees) in the cost price to see your true margin.
- Do not confuse margin with markup when pricing: a 50% markup is only a 33.3% margin.
- Enter prices without GST, since GST collected is not your income.
Common questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price. Markup is profit as a share of the cost. A 25% markup gives a 20% margin; a 100% markup gives a 50% margin.
Does this include GST and other expenses?
No. Enter prices without GST, and include costs such as packing and delivery in the cost price if you want the true margin.
How do I set a price for a target margin?
Divide the cost by (1 − margin ÷ 100). For a 20% margin on a cost of ₹800, the price is 800 ÷ 0.8 = ₹1,000.
What is a good profit margin?
It differs a lot by business. Grocery retail runs on thin margins, while software and services are much higher. Compare with others in your own trade.
Formula and text last reviewed in October 2026. Results are estimates, not financial advice.