How do I price for a 40% margin?

Divide the cost by 1 minus the margin: £60 ÷ 0.6 = £100. Choose Cost and target margin and the calculator does it for you.

Should I include VAT?

No. Use costs and prices without VAT if you're VAT registered, because the VAT isn't yours to keep.

What is a good profit margin?

It varies by industry: software and services often run high margins, food and retail lower ones. Compare against businesses like yours and make sure the margin covers your overheads.

Profit margin calculator

Free tool · no signup

Profit, margin and markup from a cost and a price — or the price you need to hit a target margin.

Cost (excluding VAT)

Selling price (excluding VAT)

Currency

Selling price

£100.00

Profit

£40.00

Margin (of price)

40.00%

Markup (on cost)

66.67%

Margin is profit as a share of the selling price; markup is profit as a share of the cost. A 50% markup is only a 33.33% margin.

What it does

Work out your profit, margin and markup from what something costs and what you sell it for, or find the price you need to hit a target margin. Margin and markup are not the same thing, and this shows both.

01
Profit, margin and markup
From a cost and a selling price: the profit, the margin as a share of the price, and the markup on cost.
02
Price for a target margin
Tell it the margin you want and it gives you the price that delivers it.
03
Price from a markup
Add a markup to your cost and see the price and the margin it really gives you.
04
Exact and private
Worked in whole pennies in your browser. Nothing is sent or stored.

How to use it

1
Choose what you know
Cost and price, cost and a target margin, or cost and a markup.
2
Enter the amounts
Use figures without VAT, so the margin reflects what your business actually keeps.
3
Compare margin and markup
Check both: a 50% markup is only a 33% margin, a common pricing mistake.

Reading your results

Good

Healthy margin

Your margin covers overheads, slow months and the time you spend selling. What counts as healthy depends on your industry.

Check

Thin margin

A small change in costs or a discount could wipe out the profit. Review your price or your costs.

Fix

Selling at a loss

The price is below the cost. Unless it's a deliberate loss leader, raise the price or cut the cost.

Why it matters

Many businesses add 30% to their costs and believe they make a 30% margin. They make 23%. Over a year of sales, that gap is the difference between a comfortable business and a stretched one. Knowing both numbers makes pricing, discounts and quotes safer.

About the profit margin calculator.

Margin is profit as a share of the selling price. Markup is profit as a share of the cost. Selling something that cost £60 for £100 is a 40% margin and a 66.67% markup.

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