Pricing math
Profit Margin Calculator for Small Business
Use this calculator before you quote, discount, or reorder inventory. It shows the difference between markup and margin so you can see whether a sale is actually worth doing.
Calculate with Margin
Start with the calculation you need
Profit margin calculator
Check gross profit, margin, and markup before you quote or discount.
Gross profit
$3,800.00
This is the money left before overhead and taxes.
Profit margin
38%
Markup
61.3%
Margin is profit divided by revenue. Markup is profit divided by cost.
Questions people usually check before using this result
Is a higher margin always better?
Usually, but not by itself. A high-margin offer with low demand can still produce less profit than a lower-margin offer that sells faster.
Does this include overhead?
Only if you include overhead in the cost field. For clearer decisions, include direct costs first, then test overhead separately.
What profit margin means
Profit margin is profit divided by revenue. If you sell a job for $1,000 and it costs $650 to deliver, the profit is $350 and the margin is 35%.
When to use markup instead
Markup starts from cost, not revenue. It is useful for setting a price from a known cost base, but it should be checked against margin before you commit.
Questions to check before you decide
Is a higher margin always better?
Usually, but not by itself. A high-margin offer with low demand can still produce less profit than a lower-margin offer that sells faster.
Does this include overhead?
Only if you include overhead in the cost field. For clearer decisions, include direct costs first, then test overhead separately.