GUIDE

How to Calculate Profit Margin

Learn the profit margin formula, see a simple example, and understand the difference between margin and markup.

Published August 7, 2026Updated August 7, 2026By ToolViso Editorial Team

Profit margin formula

Profit margin shows the percentage of sales revenue left after product cost.

Margin % = (Selling Price − Cost) ÷ Selling Price × 100

If cost is $60 and selling price is $100, profit is $40 and profit margin is 40%.

Margin uses selling price as the denominator. Markup uses cost. Use our Profit Margin Calculator to compare both.