Margin Calculator
Calculate profit margin and markup from cost and selling price, or find the price for a target margin.
What you pay to acquire the product or service.
Profit per unit
₹200
Margin
20%
Profit as % of selling price
Markup
25%
Profit as % of cost price
Margin is profit relative to the selling price; markup is profit relative to cost. A 25% markup does not equal a 25% margin.
Margin Calculator on True Calculator gives you an instant, accurate answer with no sign-up and no app install. Calculate profit margin and markup from cost and selling price, or find the price for a target margin. Every result shows the formula and a worked example so you can verify the calculation yourself, and all values are computed in your own browser — your numbers never leave your device.
Popular uses: margin calculator · profit margin · markup calculator
How We Calculate
This calculator uses standard financial formulas verified by our team. All calculations are performed instantly in your browser using JavaScript — no data is sent to any server.
We use RBI-approved formulas and regularly updated bank rates. All rates and standards are sourced from official government and regulatory websites.
When to Use This Calculator
Use the margin calculator every time you set or evaluate a price — a shopkeeper pricing stock, a wholesaler quoting bulk rates, or a freelancer deciding what an hour of work should sell for. The two modes cover the full pricing cycle: check what current cost and price produce in margin mode, then switch to target mode to find the exact selling price that delivers the margin you need. Because GST is added on top of selling prices in India, keeping margin analysis on pre-tax numbers avoids inflated-looking profits. It is also the tool for a quick product review: compute the margin on your top sellers and you will often find that the 'cheap' fast-moving line earns more per rupee than the expensive slow one. Commissions, discounts and distributor margins can be layered on separately after the base margin is set.
How to Use This Calculator
- Step 1: Choose whether to compute margin from prices or the price needed for a target margin.
- Step 2: Enter the cost price — what you pay for the product or service.
- Step 3: Enter the selling price (margin mode) or the target margin percentage (target mode).
- Step 4: Read the profit per unit, the margin and the markup — two different numbers, both shown.
Worked Example
An item costing ₹800 sold for ₹1,000 earns ₹200, a 20% margin and a 25% markup. The two percentages differ because margin divides profit by the selling price while markup divides it by cost. Working backwards, a ₹600 product priced for a 25% margin sells at ₹800 — cost divided by 0.75 — producing a 33.33% markup. The reverse mode is the one shopkeepers use most when setting festival prices.
Tips and Common Mistakes
- •Track margin, not markup, when you reason about profit per rupee of sales.
- •Compute margins on GST-exclusive prices — the tax is never yours.
- •Add overheads into the cost price before trusting the margin figure for a whole business.
- ✗Do not swap margin and markup — a 25% markup is not a 25% margin.
- ✗Do not price below cost to 'win the order' without knowing the loss per unit it creates.
Frequently Asked Questions
What is 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 price. On a ₹800 cost sold for ₹1,000, margin is 20% but markup is 25% — the two are easy to confuse.
Which one should I use when pricing my product?
Use margin when you reason about what you keep from each sale (revenue-based planning) and markup when you think in terms of adding a percentage to your cost. Pricing from markup but tracking margin is a common source of error.
How do I set a selling price for a target margin?
Divide the cost by (1 − margin/100). For a ₹600 product and a 25% margin, the price is ₹600 ÷ 0.75 = ₹800. A margin of 100% or more is impossible, so the calculator rejects it.
Should GST be included in the margin?
No. GST is collected on behalf of the government and does not belong to you, so margins are computed on GST-exclusive prices. Including GST inflates your apparent margin by the tax rate.
What is a healthy margin for a small business?
It depends heavily on the trade — grocery runs on thin margins, services and software can run much higher. Compare against your own costs and overheads rather than a generic number, and track it per product line.
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