Margin Calculator — profit margin, markup & pricing
Two ways in: enter what a job costs and what you charge to see your profit, gross margin, and markup — or set the margin you want and get the exact price to charge.
The one confusion that quietly eats profit
Margin and markup are not the same number, and mixing them up always cuts the same way: against you. Margin is profit as a share of the price; markup is profit as a share of the cost. Add a “50% markup” to a $600 job and you charge $900 — but that's only a 33% margin. If you actually needed 50% margin, the right price was $1,200. The calculator shows both numbers side by side for exactly this reason.
Worked examples
| Cost | Price | Profit | Margin | Markup |
|---|---|---|---|---|
| $600 | $900 | $300 | 33.33% | 50% |
| $600 | $1,000 | $400 | 40% | 66.67% |
| $600 | $1,200 | $600 | 50% | 100% |
| $2,500 | $3,400 | $900 | 26.47% | 36% |
Pricing forward, not backward
Most people price backward: guess a number, then discover the margin later — sometimes on their tax return. Pricing forward is one division: decide the margin your business needs, and the “Price for a margin” mode gives the number to put on the estimate. Pair it with the hourly rate calculator for labour and the break-even calculator to know how many jobs at that margin cover your fixed costs.
From margin to money in the bank
A margin only becomes profit when the job is billed and paid. The free invoice generator takes the price straight onto a line item, applies the right tax on top (margins are pre-tax; the invoice handles GST/HST or your local rate), and produces a clean PDF — unlimited, no account. If the payment drags, the payment reminder generator writes the chase email and the late fee calculator prices the delay.
Frequently asked questions
How do I calculate profit margin?
Margin = (price − cost) ÷ price × 100. A job that costs you $600 and sells for $1,000 has $400 profit and a 40% gross margin. Enter cost and selling price above and the margin, markup, and profit are computed instantly.
What's the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of the cost. The same $600-cost, $1,000-price job is a 40% margin but a 66.67% markup. Mixing them up underprices work — a '50% markup' is only a 33% margin.
How do I price a job to hit a target margin?
Divide cost by (1 − target margin). For a 40% margin on a $600 cost: $600 ÷ 0.60 = $1,000. Switch the calculator to “Price for a margin,” enter cost and target, and the required selling price is computed for you.
What is a good profit margin for a small business?
It varies widely by industry. Many service trades run 30–50% gross margins; retail often runs 20–40%; food can be thinner. What matters is that your margin covers overhead and leaves real net profit — track it per job and per client rather than chasing a single magic number.
Is this gross margin or net margin?
Gross margin — revenue minus the direct cost of the job or product. Net margin also subtracts overhead like rent, insurance, and software. Compute gross margin per job here, then make sure the total across jobs covers your fixed costs — the break-even calculator handles that side.
Does margin include tax?
No — calculate margin on pre-tax amounts. Sales tax you collect (GST/HST or state sales tax) is not revenue; it passes through to the government. Price on pre-tax numbers, then let the invoice add the correct tax on top.
How do I turn this price into an invoice?
Tap “Create an invoice for this job” and the free generator opens — put the selling price on a line item, pick your tax setting, and download the PDF. No signup, no watermark, totals always computed by code.