EthicalFusion

Profit Margin Calculator

Calculate profit, margin and markup from cost and price.

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Enter the cost price and the selling price of a product, service or order, and the Profit Margin Calculator returns three figures: the profit in money, the margin as a percentage of the selling price, and the markup as a percentage of cost. When the price is below cost, the headline changes from Profit to Loss and both percentages turn negative, so you can see at once how much a clearance sale is costing you.

How the three numbers are worked out

  • Profit = selling price − cost price
  • Margin = profit ÷ selling price × 100
  • Markup = profit ÷ cost price × 100

Example: a tailoring job costs ₹1,200 in fabric, thread and labour and is billed at ₹1,500. Profit is ₹300, margin is 300 ÷ 1,500 = 20%, and markup is 300 ÷ 1,200 = 25%. Percentages are shown to at most two decimal places.

When the result says Loss

Suppose last season's stock cost ₹500 a piece and you clear it at ₹450. The calculator shows Loss 50.00, a margin of −11.11% and a markup of −10%. The margin is negative because you gave away 11.11% of every rupee of sales. Knowing the exact loss per unit helps you decide whether to hold the stock or take the hit.

Why discounts eat margin so fast

Take the ₹1,500 job again, with its 20% margin, and offer 10% off. The price drops to ₹1,350 while the cost stays at ₹1,200:

Full price10% off
Selling price₹1,500₹1,350
Profit₹300₹150
Margin20%11.11%

A 10% discount halved the profit, so you would need to sell twice as many units just to earn the same amount. Run your planned sale price through the calculator before announcing an offer, or use the discount calculator to get the discounted price first.

Gross margin versus net margin

With a single product's purchase cost and price, the result is a gross margin: it ignores rent, salaries, electricity, marketplace commission and payment gateway fees. To see your net margin, enter totals for a period instead. A shop with monthly sales of ₹5,00,000 and total monthly costs of ₹4,40,000 has a profit of ₹60,000 and a net margin of 12%.

A healthy gross margin can still hide a thin net margin, which is why it helps to run both. If you want to know how many units cover your fixed costs, the break-even calculator takes it from there.

Tips for accurate results

  • Leave GST out of both figures if you are registered, since collected tax is not revenue.
  • Count every cost of getting the item sold, including shipping to the customer if you pay it.
  • For marketplaces, subtract the platform's commission from the selling price or add it to cost.

The output is simple arithmetic to support pricing decisions, not financial advice.

Frequently asked questions

How do I calculate profit margin percentage?
Subtract cost from selling price, divide the result by the selling price and multiply by 100. A ₹300 profit on a ₹1,500 sale is a 20% margin.
Can profit margin be more than 100%?
No, not while costs are zero or more, because profit can never exceed the selling price. Markup has no such ceiling and can go well above 100%.
Why is my margin negative?
The selling price is below the cost price, so every sale loses money. The calculator labels the amount as a loss and shows the margin and markup as negative percentages.
Can I use monthly totals instead of one product?
Yes. Enter your total costs for the month as the cost price and total sales as the selling price to get the net margin for the whole business.
Should the selling price include GST?
For a GST-registered business, no. Use prices without GST on both sides, because the tax collected belongs to the government rather than to your profit.

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