Profit Margin Calculator

FinanceLast updated: August 17, 2026

There are two ways to measure profitability, and they are often confused: markup compares profit to cost, while profit margin compares profit to the selling price. On an item bought for 800 ₺ and sold for 1,000 ₺ the markup is 25% and the margin is 20% — both are correct, but they answer different questions.

This calculator runs in two modes: enter the cost and the selling price to see the profit, the markup, and the margin, or enter the cost and your target margin to get the selling price you need. It is built for online sellers, shopkeepers, and anyone setting prices.

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What the product or service costs you in total.
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Formula

Profit = Selling Price − Cost
Markup = Profit / Cost × 100
Profit Margin = Profit / Selling Price × 100
Selling Price = Cost / (1 − Target Margin / 100)

Multiplying the cost by (1 + margin/100) to reach a target margin is a common mistake — that is the markup formula. For a 20% margin, the correct operation is dividing the cost by 0.80.

How to Calculate

  1. Choose the calculation type: finding profit and margin, or finding the selling price from a target margin.
  2. Enter the cost of the item (purchase price plus shipping, commission, and any other costs).
  3. Enter the selling price in the first mode, or your target profit margin in the second.
  4. Read the profit, the markup and margin percentages, or the required selling price in the results section.

Worked Examples

Profit, markup, and margin

An item bought for 800 ₺ and sold for 1,000 ₺ makes a profit of 200 ₺. The markup is 200 / 800 = 25% and the profit margin is 200 / 1,000 = 20% — two different percentages for the very same sale.

Profit: 200.00 ₺ · Profit margin (on selling price): 20.00% · Markup (on cost): 25.00%

Selling price from a target margin

To sell an item costing 800.00 ₺ at a profit margin of 20.00%, the list price has to be 1,000.00 ₺; the sale leaves 200.00 ₺ of profit, which is a markup of 25.00% when measured against cost. Margin is measured against the selling price and markup against cost, and mixing the two up leads to underpricing.

Required selling price: 1,000.00 ₺ · Profit: 200.00 ₺ · Profit margin (on selling price): 20.00%

A high-markup example

An item costing 60 ₺ sold for 90 ₺ makes a profit of 30 ₺: the markup is 30 / 60 = 50% and the profit margin is 30 / 90 = 33.33%. The markup is always larger than the margin.

Profit: 30.00 ₺ · Profit margin (on selling price): 33.33% · Markup (on cost): 50.00%

Frequently Asked Questions

What is the difference between markup and profit margin?
Markup divides profit by cost; profit margin divides profit by the selling price. With a cost of 800 ₺ and a sale at 1,000 ₺ the profit is 200 ₺: the markup is 25% (200/800) and the margin is 20% (200/1,000). Markup is used when setting prices and margin when reporting profitability, and the markup is always the larger of the two.
How do you find the selling price from a target profit margin?
Divide the cost by (1 − margin/100). For an item costing 800 ₺ with a 20% target margin: 800 / 0.80 = 1,000 ₺. Multiplying the cost by 1.20 is wrong; that gives a 20% markup and leaves your real margin at 16.67%.
Can a profit margin exceed 100%?
No. Because margin is profit as a share of the selling price, it only approaches 100% even if the cost falls to zero. Percentages of 100% and above always refer to markup: buying at 100 ₺ and selling at 300 ₺ is a 200% markup but a 66.67% margin.
Are gross profit and net profit the same thing?
No. This calculator works out gross profit: selling price minus the cost of the item. Net profit is what remains after operating expenses such as rent, staff, marketing, commissions, and taxes are deducted from gross profit, and it is always smaller.
Should VAT be included in the profit calculation?
It should not. VAT is not your revenue; you collect it on behalf of the state. Use the amounts excluding VAT for both the selling price and the cost. Calculating with VAT-inclusive prices makes your margin look higher than it is.
How should cost be calculated in e-commerce?
Add every sale-related expense to the purchase price: marketplace commission, shipping, packaging, and the cost of returns. If you count only the purchase price as cost, an apparent 20% margin can easily fall to zero once commission and shipping are taken out.