Pricing tool
Profit Margin Calculator
Work out gross profit, markup, and profit margin from your cost price and selling price. This is useful for pricing products, checking service packages, and avoiding weak margins.
Profit margin tool
Enter your cost and selling price to compare profit, markup, and margin clearly.
Gross profit
£50.00
Markup
100.00%
Margin
50.00%
Quick notes
- • Markup and margin are different percentages, so they should not be used interchangeably.
- • Small pricing changes can have a bigger effect on margin than many people expect.
- • Use this as a quick pricing sense-check before publishing a rate, quote, or product price.
Need more context?
Markup vs margin explained
See why the two percentages differ and why that matters when you price products or services.
Read guideWhat this calculator helps you do
Check if a price is strong enough
Before you publish a price or send a quote, you can see whether the gap between cost and selling price is actually giving you enough room.
Compare different price points
Testing a few selling prices quickly helps you understand how much each change affects your profit and margin before you make a decision.
Avoid margin and markup confusion
Many pricing mistakes happen because markup and margin are treated as though they mean the same thing. They do not.
Worked examples
Example 1: product pricing
If an item costs £40 and you sell it for £60, your gross profit is £20.
That gives you a 50% markup because the profit is half of the cost price, and a 33.3% margin because the profit is one third of the selling price.
Example 2: improving a weak margin
If your cost is still £40 but you increase the selling price to £75, your gross profit rises to £35.
That changes the result to 87.5% markup and roughly 46.7% margin. A relatively small price change can make a big difference to the quality of the sale.
Common pricing mistakes to avoid
- Treating markup and margin as though they are the same percentage.
- Focusing on revenue without checking how much profit is actually left after the direct cost of the item or service.
- Forgetting extra costs such as packaging, delivery, payment processing fees, or software costs.
- Setting prices to match competitors without checking whether the result still works for your business.
Who this is for
- Small businesses reviewing product pricing.
- Freelancers packaging services into fixed-fee offers.
- Sole traders checking whether a quote is commercially sensible.
- Anyone who wants a quick margin sense-check without using a spreadsheet.
Quick tip
A price can look fine on the surface and still leave too little profit behind. Always check the percentage result as well as the pound figure.
Read the guide or open the starter pack
Use the guide to understand the difference between markup and margin, or open the free starter pack for quick pricing support and reference notes.