Price review
Check the gross margin at a proposed selling price.
Free · Money & business · No account needed
Profit-margin calculator
Find gross profit, margin on selling price and markup on cost.
No account needed. Nothing is saved automatically.
Your inputs
Starting values are examples, not recommended rates.
Your estimate
- Gross profit
- 250USD
- Gross margin
- 25%
- Markup
- 33.33%
Gross margin is not net profit: overhead, interest and tax are excluded. A loss produces a negative margin.
How this tool works
Gross profit = selling price − cost. Margin = profit / selling price × 100; markup = profit / cost × 100.
What should I check before using the result?
Gross margin is not net profit: overhead, interest and tax are excluded. A loss produces a negative margin.
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Review the method
Gross profit = selling price − cost. Margin = profit / selling price × 100; markup = profit / cost × 100.
Check before using the result
Gross margin is not net profit: overhead, interest and tax are excluded. A loss produces a negative margin.
Practical guidance
Use the result with confidence
Margin and markup describe the same gross profit from different starting points. Margin divides profit by selling price; markup divides profit by cost. This calculator shows both so a pricing decision is not built on the wrong percentage.
Before you finish
- Cost and price cover the same unit or scope.
- Direct costs are complete and use one currency.
- Gross margin is not being treated as net profit.
Original process diagram
Margin evidence flow
1Record revenue
2Subtract direct cost
3Compare profit and margin
Evidence and accountability
- Written by
- UtilityHub Product Team
- Reviewed by
- Calculation Review
- Last reviewed
- 2026-09-20
- Method guide
- Open related guide
Reproducible worked example
Why 33.33% markup produces 25% margin
An item costs $750 and sells for $1,000. The same $250 gross profit produces different percentages because margin and markup use different denominators.
Example inputs
- Direct cost
- $750
- Selling price
- $1,000
Replace these example values in the calculator or generator to reproduce the result.
Calculation
- Gross profit = $1,000 − $750 = $250
- Margin = $250 ÷ $1,000 × 100 = 25%
- Markup = $250 ÷ $750 × 100 = 33.33%
- Gross margin
- 25%
- Markup on cost
- 33.33%
What this shows: margin and markup are not interchangeable even when the profit amount is identical.
Assumptions
- The $750 figure contains every direct cost for the same unit sold.
- No discount or refund changes the $1,000 selling price.
Limits of the result
- Overhead, interest, tax and owner compensation are excluded.
- Gross margin alone does not show cash flow or net profitability.
Common uses
Quote preparation
Compare cost, price and gross profit before sending a quote.
Product comparison
Review which items contribute more gross profit before overhead.
Recommended workflow
- 1Enter the complete direct cost for one item or job.
- 2Enter the selling price before any unmodelled tax or fee.
- 3Compare gross profit, margin and markup.
- 4Test a second price and record the assumptions behind the decision.
Questions
Is margin the same as markup?
No. Margin is profit divided by selling price; markup is profit divided by cost.
Does this calculate net profit?
No. It calculates gross profit before overhead, interest and tax.
What happens when cost exceeds price?
Gross profit and margin become negative, showing a loss before overhead.