Break-Even Calculator
Calculate break-even units, break-even revenue, contribution margin, target profit sales, and margin of safety.
Share
The inputted text is too long to include in a share link.
Profit Margin & Markup Calculator
Calculate profit margin, markup, and gross profit per unit from product cost and sale price.
Product pricing
Interpret your margin and markup
Profit margin and markup describe the same gross profit from different bases. Margin compares profit with selling price. Markup compares profit with cost.
Inputs that matter most
- Cost per unit: the direct cost tied to one sale.
- Selling price per unit: the customer price used to calculate gross profit.
- Profit per unit: selling price minus cost per unit.
Common mistakes
- Treating a 40% markup as the same as a 40% margin.
- Leaving out payment fees, packaging, fulfillment, commissions, or direct labor from cost.
- Using revenue after discounts in one place and list price in another.
- Comparing gross margin with net profit after overhead, taxes, and financing.
When this estimate can be misleading
This calculator is a simple gross profit model. It does not include fixed overhead, refunds, taxes, financing costs, inventory timing, or multi-product sales mix.
Scenarios to try
- Raise cost to include payment processing or fulfillment fees.
- Lower selling price to test a promotion or discount.
- Compare a few price points to see how margin and markup move.
- Include direct labor or commissions in cost when they apply to each sale.
Next-step utilities
How to use this profit margin calculator
Use this calculator when pricing a product, quote, service package, or wholesale item.
- Enter the direct cost per unit and selling price per unit.
- Include costs that move with each sale, such as materials, packaging, fulfillment, payment fees, commissions, or direct labor.
- Review profit per unit, margin, and markup in the result panel.
- Change the cost or price to compare alternate price points.
Profit Margin & Markup Calculator features
- Calculate gross profit per unit from cost and selling price.
- Calculate profit margin as profit divided by selling price.
- Calculate markup as profit divided by cost.
- Update results instantly as cost or selling price changes.
Margin vs markup
Margin and markup are easy to mix up because they use the same profit amount with different denominators.
Margin answers: what share of the selling price is gross profit? Markup answers: how much profit is added on top of cost?
For example, a product that costs $60 and sells for $100 has $40 of gross profit, a 40% margin, and a 66.7% markup.
This distinction matters when comparing retail pricing, wholesale pricing, discounts, and service quotes. A seller who wants a target margin must solve from selling price, while a seller applying a markup starts with cost and adds a percentage on top.
Use direct cost consistently. If you include payment fees in one scenario but not another, the margin comparison can look better or worse for reasons unrelated to price.
Profit margin and markup formulas
The calculator uses gross profit formulas for one product or service.
G = P - C
P is selling price per unit, and C is cost per unit.
Margin = (P - C) / P
Margin divides gross profit by selling price.
Markup = (P - C) / C
Markup divides gross profit by cost.
The formulas describe gross profit for one unit. They do not account for fixed monthly overhead, refunds, taxes, inventory losses, advertising spend, or a mix of products with different margins unless you add those costs into the unit cost yourself.
Profit margin and markup FAQ
What is the difference between margin and markup?
Margin is gross profit divided by selling price. Markup is gross profit divided by cost. A 40% markup is lower than a 40% margin.
Should I use margin or markup for pricing?
Many sellers use markup to set prices from cost, then check margin to understand how much of each sales dollar remains as gross profit.
Does this calculate net profit?
No. This is a gross profit calculator. It does not subtract rent, salaries, taxes, financing, software, or other overhead unless you include those costs in the unit cost yourself.
What should I include in cost per unit?
Include direct costs tied to the sale, such as product cost, materials, packaging, fulfillment, payment fees, commissions, or direct labor when those apply.
How do discounts affect margin?
Enter the discounted selling price instead of the list price. A discount lowers gross profit and can reduce margin quickly when cost stays the same.
Can I use this for services?
Yes, if you can estimate the direct cost of delivering one service package or billable unit. Include labor or subcontractor costs when they vary with each sale.
Built and maintained by utilkit. Found an issue? Send corrections to contact@utilkit.com
Related Utilities
Collections featuring this utility
Small Business
Small business math should answer everyday decisions: can this offer work, is the price healthy, was the meeting worth it, and did the campaign pay for itself?
Related Blog Posts
View all
4 min read
Business
Break-Even Analysis: Find the Number That Makes a Plan Work
Calculate break-even units and revenue, test contribution margin assumptions, and add a margin of safety before using the result for a real business decision.