Calculator
Profit Margin Calculator
Cost vs profit
- Cost₹70,00070%
- Profit₹30,00030%
This measures gross profitability on the figures you enter. For net margin, use revenue and total cost including overheads, taxes, and indirect expenses.
Profit margin tells you how much of every rupee of sales you actually keep after costs — the clearest measure of whether your pricing works. This calculator takes your revenue and cost and returns the profit, the profit margin (profit as a share of revenue), and the markup (profit as a share of cost). Use it to price products, compare product lines, and check whether a discount still leaves you a healthy margin. It is built for Indian businesses — work in ₹, and treat the margin as your pre-GST selling price so you compare quotes on the same basis.
What your result means
- Margin is profit as a percentage of revenue; markup is profit as a percentage of cost — the same rupee profit gives a higher markup than margin, so do not confuse the two when pricing.
- Net margin (after all costs, including overheads and tax) is what really matters; a healthy gross margin can still end in a thin or negative net margin.
- Benchmark against your industry — a 30% margin is great in retail but thin in software; thin-margin businesses must win on volume.
How to use this calculator
- Enter the revenue — the price you sell at (per unit or total).
- Enter the cost — what it costs you to make or buy the same thing.
- Read the profit, then the margin and markup percentages.
- Use margin to judge profitability; use markup when setting price up from cost.
- Test a discount by lowering revenue to see how fast margin shrinks.
The formula
Profit = Revenue − Cost. Profit margin (%) = (Profit ÷ Revenue) × 100. Markup (%) = (Profit ÷ Cost) × 100. Margin can never exceed 100%; markup can.
Worked example
You sell a product for ₹1,00,000 that costs you ₹70,000. Profit = ₹30,000. Margin = 30,000 ÷ 1,00,000 = 30%. Markup = 30,000 ÷ 70,000 ≈ 42.9%. The same ₹30,000 profit is a 30% margin but a ~43% markup — which is why quoting “margin” and “markup” interchangeably leads to underpricing.
When to use it
- Setting a selling price from a known cost using a target markup.
- Comparing the profitability of different products or services.
- Checking whether a proposed discount still leaves an acceptable margin.
- Explaining to a client or partner why a price is what it is.
Frequently Asked Questions
References & sources
How this calculator was checked: The margin/markup formulas (Margin = Profit/Revenue x 100; Markup = Profit/Cost x 100) were checked against their derivation and re-run against the worked example on 2026-07-27 -- the 30% margin / ~42.9% markup figures on Rs30,000 profit match the actual output exactly, so no correction was needed. Not reviewed by a registered accountant.