Profit margin is profit divided by the selling price. Markup is profit divided by the cost. Buy at Rs 800 and sell at Rs 1,250, and the profit is Rs 450: a 36% margin but a 56.25% markup.
Enter your cost and price above, or pick a target margin and let the calculator set the price. Open the extra costs section if you pay for delivery, packing or a seller commission, because those come out of the same Rs 450.
Formulas
| What | Formula | Rs 800 cost, Rs 1,250 price |
|---|---|---|
| Profit | price − cost | 1,250 − 800 = Rs 450 |
| Margin | profit ÷ price × 100 | 450 ÷ 1,250 = 36% |
| Markup | profit ÷ cost × 100 | 450 ÷ 800 = 56.25% |
| Price for a margin | cost ÷ (1 − margin) | 800 ÷ 0.70 = Rs 1,142.86 for 30% |
| Price for a markup | cost × (1 + markup) | 800 × 1.50 = Rs 1,200 for 50% |
Margin can never reach 100%, because that would mean the goods cost nothing. Markup has no upper limit.
Margin and markup are not the same
Wholesalers and shopkeepers often say "I keep 30%" without saying which one. The gap matters. Adding 30% to a Rs 1,000 cost gives a Rs 1,300 price, but the margin on that price is only 23.08%. To make a true 30% margin you must sell at Rs 1,428.57.
Use markup when you price from the supplier's bill. Use margin when you compare products, plan how much of each sale is left after costs, or read a business's accounts.
Margin to markup
| Margin | Same as markup of | Cost Rs 1,000 sells at |
|---|---|---|
| 10% | 11.11% | Rs 1,111.11 |
| 15% | 17.65% | Rs 1,176.47 |
| 20% | 25% | Rs 1,250 |
| 25% | 33.33% | Rs 1,333.33 |
| 30% | 42.86% | Rs 1,428.57 |
| 33.33% | 49.99% | Rs 1,499.93 |
| 40% | 66.67% | Rs 1,666.67 |
| 50% | 100% | Rs 2,000 |
Worked example: an online seller
You sell a kitchen item online. It costs Rs 800 from the wholesaler. Packing and your share of delivery come to Rs 100 an item, and the platform takes a 10% commission on the selling price. You want a 30% margin.
Price = (800 + 100) ÷ (1 − 0.30 − 0.10) = 900 ÷ 0.60 = Rs 1,500.
Check: commission is 10% of 1,500 = Rs 150. Profit = 1,500 − 800 − 100 − 150 = Rs 450, and 450 ÷ 1,500 = 30%.
If you had simply added 30% to Rs 800 and sold at Rs 1,040, the commission and delivery would leave you Rs 36 profit an item. Marketplace fees, payment charges and courier rates change often and differ by category, so take the percentage from your own seller statement. This calculator does not assume any platform's fees.
Break-even price
The break-even price is the price at which profit is zero. With no commission it is simply your cost. With a commission it is cost ÷ (1 − commission). In the example above, 900 ÷ 0.90 = Rs 1,000. Any discount that takes the price below Rs 1,000 loses money on every sale. Before you run a sale, test the discounted price in the discount calculator and then check it here.
Profit and margin questions
How do I calculate profit percentage?
Divide the profit by the cost price and multiply by 100. This is the profit percentage used in school maths and most shop talk, and it is the same as markup. Bought for Rs 2,000 and sold for Rs 2,500: profit Rs 500, and 500 ÷ 2,000 × 100 = 25%.
What is a good profit margin for a shop?
It depends on the trade. Fast-moving groceries often run on thin margins and make money on volume, while clothing, cosmetics and accessories usually need higher margins to cover unsold stock and rent. Compare your margin with your fixed costs: rent, salaries and bills must be paid out of the total margin you earn each month.
How do I set a price for a 25% margin?
Divide the cost by 0.75. A cost of Rs 600 gives a price of 600 ÷ 0.75 = Rs 800. Check: profit is Rs 200, and 200 ÷ 800 = 25%. If you have commission or delivery costs, pick "Price for a target margin" above and add them.
Is profit margin calculated on cost or on selling price?
Margin is always on the selling price. Markup is on the cost. When someone gives a percentage without saying which, ask, because a 50% markup is only a 33.33% margin.
Should sales tax be part of my price?
Sales tax you collect belongs to the government, so it is not part of your profit. Work out your margin on the price before tax, then add tax on top if you are registered. The sales tax calculator adds or removes tax from a price.
Last reviewed 30 September 2026. Results are estimates; official notices always take precedence.