Profit margin calculator (margin vs markup)
Enter cost and price, or the margin you want, and see margin, markup and profit per unit. If your price already includes sales tax, the calculator takes it out first.
The short answer
Profit margin is profit divided by the selling price: (price − cost) ÷ price × 100. Markup divides the same profit by cost instead. An item that costs $18 and sells for $30 has a 40% margin but a 66.67% markup. To hit a target margin, divide cost by (1 − margin).
How it is calculated
Profit = price − cost
Margin = profit ÷ price × 100
Markup = profit ÷ cost × 100
Price for a target margin = cost ÷ (1 − margin)
Markup from margin = margin ÷ (1 − margin)
Worked example
Jordan sells handmade candles on Etsy and on her own Shopify store. Each one costs $18 in wax, jar, wick and packaging, and sells for $30.
- Profit: $30 − $18 = $12
- Margin: $12 ÷ $30 = 40%
- Markup: $12 ÷ $18 = 66.67%
- If Jordan had added "40%" to cost, she would charge $25.20, a margin of only 28.57%. A true 40% margin needs $30.
Jordan's candles run a 40% margin and a 66.67% markup, before marketplace and payment fees.
Quick reference table
| Margin | Markup | Selling price | Profit |
|---|---|---|---|
| 10% | 11.11% | $111.11 | $11.11 |
| 20% | 25% | $125 | $25 |
| 25% | 33.33% | $133.33 | $33.33 |
| 30% | 42.86% | $142.86 | $42.86 |
| 40% | 66.67% | $166.67 | $66.67 |
| 50% | 100% | $200 | $100 |
| 60% | 150% | $250 | $150 |
Special cases and common mistakes
- Margin can never reach 100%; markup can go past it. Doubling your cost is a 100% markup but only a 50% margin. If a supplier or a course quotes "50%", ask which one they mean.
- The cost × 1.4 trap. Adding 40% to cost gives a 28.57% margin, not 40%. For a target margin, divide: cost ÷ 0.60 for 40%, cost ÷ 0.70 for 30%.
- Count every per-unit cost. Etsy, Shopify, Amazon and other platforms charge listing, transaction or payment processing fees, and shipping you pay out of pocket is a cost too. Check your own fee statement and add those amounts to cost, or the margin shown is higher than what you keep.
- Sales tax is not profit. In the US and Canada sales tax is usually added on top of your price at checkout, so leave the tax field at 0 and enter your price before tax.
- If your price already includes tax, take it out first. Ontario's HST is 13%. A candle sold for $30 including HST, with an $18 cost, brings in $26.55 before tax, so the margin drops to 32.2%. Check "includes sales tax" and enter your rate.
Frequently asked questions
How do you calculate profit margin?
Subtract cost from the selling price, divide by the selling price, and multiply by 100. Cost $18, price $30: profit $12, margin 12 ÷ 30 = 40%.
What is the difference between margin and markup?
Both use the same profit. Margin divides it by the selling price; markup divides it by cost. So markup is always the larger number: a 40% margin equals a 66.67% markup.
How do I find the selling price from cost and margin?
Price = cost ÷ (1 − margin). For a $70 cost and a 30% margin: 70 ÷ 0.70 = $100. Choose "Cost and target margin" in the calculator.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 50% markup is 0.5 ÷ 1.5 = 33.33% margin. The table above shows common pairs.
Should I include Etsy or Shopify fees in my cost?
Yes. Any fee you pay per sale, such as listing, transaction or payment processing fees, lowers what you keep. Add it to the cost per unit to see your real margin.
Sources
- Canada Revenue Agency, GST/HST rates by province and territory (Last reviewed: October 9, 2026)