Profit margin and markup calculator

Margin is profit as a percentage of the selling price: margin% = profit / selling price x 100. Markup is profit as a percentage of the cost: markup% = profit / cost x 100. For the same product, margin is always lower — e.g. cost PLN 100, sell PLN 125: margin 20%, markup 25%.

It varies by industry. Electronics: 5-15%. Clothing and footwear: 40-80%. Grocery: 10-30%. Software and digital: 60-90%. Professional services: 50-70%. The key is that your margin covers all fixed costs and generates operating profit.

Selling price = cost / (1 - margin%). Example: cost PLN 80, target margin 40%. Price = PLN 80 / (1 - 0.40) = PLN 80 / 0.60 = PLN 133.33. This formula guarantees the target margin regardless of cost level.

Selling price = cost x (1 + markup%). Example: cost PLN 80, markup 50%. Price = PLN 80 x 1.50 = PLN 120. Note: the actual margin on this sale will be lower than the markup percentage.

Margin is calculated on net (ex-VAT) prices. Use net prices for both cost and selling price — VAT is a pass-through tax that does not affect your actual profit. Add VAT on top of the net selling price after setting your desired net margin.

Gross margin = (selling price - cost of goods) / selling price x 100. It excludes operating costs. Net margin deducts all expenses including overheads and taxes. This calculator computes gross (product-level) margin.

Yes. A 100% markup means you doubled your cost. Markups above 100% are common in cosmetics, luxury goods, and software. Margin, however, can never exceed 100% — profit cannot be greater than revenue.

Break-even point = fixed costs / gross margin. A higher margin lowers the BEP — meaning fewer units need to be sold to cover fixed costs. Example: fixed costs PLN 5,000, margin 50% — BEP = PLN 10,000 in revenue.

E-commerce typically has lower store costs but higher delivery, returns, and digital marketing costs. Physical retail has higher rent and staff costs. Net margin can be similar — the key is covering total fixed costs at the given sales volume.

No — the calculator uses a single pair of prices. If you apply a discount, enter the actual after-discount price in the "Selling price" field. For discount impact analysis, use the Discount Calculator.