A familiar situation
Before setting a product price, compare its selling price with unit cost to see the gross margin as a share of revenue. Margin and markup use different denominators, so use the one your pricing decision requires.
How to use this calculator
- Enter cost, selling price.
- Select Calculate to see the answer and its breakdown.
- Keep a scenario, change an input and compare the results.
Use consistent units and check the assumptions below before applying the result.
How margin is calculated
Gross margin divides profit by the selling price. The separate markup detail divides the same profit by cost, so the two percentages answer different pricing questions. Formula: Gross margin = (selling price − cost) ÷ selling price. Use the displayed details to inspect the intermediate amounts and replace example assumptions with terms from your own quote or records.
Gross margin = (selling price − cost) ÷ selling price.A $60 cost and $100 sale price produce $40 gross profit and a 40% margin.
Assumptions & useful context
The result depends on the values you enter and the method described above. Displayed numbers may be rounded; calculations use the unrounded values. Check that this model matches your situation before relying on it.
Financial projections use your assumptions. Actual returns, lender terms, fees and tax rules can differ; these results do not guarantee a future outcome.
Frequently asked questions
Margin Calculator: what does the result include?
Gross profit is divided by selling price. This differs from markup, which divides profit by cost.
Margin Calculator: which assumptions matter most?
No. It subtracts only the entered cost from the selling price, before overhead, tax, shipping or other expenses.