Profit margin and markup calculator
See your margin and markup from cost and selling price, or work out the price that gives you the margin you want.
Profit margin
Formula: Margin = (price - cost) ÷ price · Markup = (price - cost) ÷ cost
How to use it
Cost and selling price to get the margin, or cost and a target margin to get the selling price.
What you pay for one unit before tax, plus its share of delivery if you pay for it.
Profit in dinars, margin on the selling price and markup on cost, side by side.
Margin and markup are two different numbers, and mixing them up costs shops real money. Buy an item for 7.500 JOD, sell it for 10.000 JOD, and your profit is 2.500 JOD. Margin is measured against the selling price: 2.500 ÷ 10.000 = 25%. Markup is measured against cost: 2.500 ÷ 7.500 = 33.33%. Same profit in dinars, different percentage, depending on what you divide by.
If you want a specific margin, don't add that percentage to your cost. Adding 25% to a 7.500 cost gives a price of 9.375 JOD, and the real margin on that is only 20%. To actually earn a 25% margin, divide the cost by (1 - 0.25): 7.500 ÷ 0.75 = 10.000 JOD. Always do this on prices before sales tax, because the tax goes to the government and is not part of your profit.
Ghalleh keeps the cost of every product next to its price and shows your profit each day as sales minus cost.
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Common questions
What's the difference between margin and markup?
Margin is profit divided by the selling price. Markup is profit divided by cost. An item that costs 7.500 JOD and sells for 10.000 JOD has a 25% margin and a 33.33% markup.
How do I find the price for a target margin?
Divide the cost by (1 - margin). For a 20% margin on an item that costs 4.000 JOD: 4.000 ÷ 0.80 = 5.000 JOD. Your profit is 1.000 JOD, which is 20% of the price.
Should I calculate margin before or after tax?
Before. Use cost and selling price without sales tax, because the tax your customer pays goes to the tax department, not into your profit.
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