Profit Margin Calculator

Calculate profit margins, markup percentages, and break-even points for your business.

Margin vs Markup — What's the Difference?

These terms are often confused but have very different meanings:

Margin (Profit Margin): Profit as a percentage of the selling price.
Formula: Margin % = (Profit ÷ Selling Price) × 100
Markup: Profit as a percentage of the cost price.
Formula: Markup % = (Profit ÷ Cost Price) × 100

Example: Cost = ₹100, Selling Price = ₹150

Profit = ₹50
Margin = 50 ÷ 150 × 100 = 33.33%
Markup = 50 ÷ 100 × 100 = 50%

Margin is always less than markup for the same transaction. A 50% markup does NOT mean 50% margin!

About Profit Margin Calculator

The Profit Margin Calculator computes gross profit margin, net profit margin, and operating profit margin for businesses. Understanding profit margins is crucial for pricing strategy, financial planning, and investor communication. Gross margin shows profitability after direct costs, operating margin reflects core business efficiency, and net margin indicates overall profitability after all expenses including taxes and interest for FY 2026-27.

Profit margins vary significantly across industries in India — software companies maintain 20-30% net margins, FMCG companies 8-15%, and retail businesses 2-5%. Tracking margins over time helps identify trends, cost inefficiencies, and pricing opportunities. Our calculator also computes markup percentage (the amount added to cost to arrive at selling price), which is different from margin (the percentage of selling price that is profit) — a common confusion that leads to pricing errors.

Key Features

Gross, operating, and net profit margin computation
Markup vs margin comparison
Multi-product margin analysis
GST-inclusive and exclusive pricing
Benchmark margins by industry

Frequently Asked Questions

What is the difference between margin and markup?

Margin is the percentage of the selling price that is profit: Margin = (Selling Price - Cost) / Selling Price × 100. Markup is the percentage of cost added to arrive at the selling price: Markup = (Selling Price - Cost) / Cost × 100. For example, if cost is ₹80 and selling price is ₹100, the margin is 20% (₹20/₹100) but the markup is 25% (₹20/₹80). Confusing these two can lead to significant pricing errors.

What is a good profit margin for a business in India?

Good profit margins vary by industry: IT/Software — 20-30% net margin; Pharma — 15-20%; FMCG — 8-15%; Manufacturing — 5-10%; Retail — 2-5%; Restaurants — 5-10%. A net margin above 10% is generally considered healthy for most industries. However, even a low-margin business can be profitable with high volume — which is why comparing margins should always be done within the same industry.

Profit Margin Calculator