Profit Calculator
Revenue, costs and the profit left, with the margin and the mark-up.
Profit is revenue minus costs, and the two percentages that describe it are not the same number. A margin is profit as a share of the selling price; a mark-up is profit as a share of the cost. Confusing them is one of the most common pricing mistakes.
Enter the revenue and the costs, and this calculator shows the profit, both percentages and what happens to the margin if the cost changes.
At a glance
- What you enter
- Revenue, Costs, Cost increase to test, Target margin
- What you get
- Profit, Profit margin, Mark-up on cost, Margin after the cost increase
- Formula shown
- Yes - every step, right below your results.
- Cost and privacy
- Free, no account needed, and nothing you type is stored.
See worked examples ↓ Read the FAQ ↓ Share this calculator ↓
Results are estimates for general information only - always verify with a professional or official source before acting on them.
How to use the Profit Calculator
- 1 Enter Revenue
- 2 Enter Costs
- 3 Enter Cost increase to test
- 4 Enter Target margin - Used to show the price that would deliver it.
- 5 Press Calculate. You get Profit, Profit margin, Mark-up on cost, Margin after the cost increase, and every intermediate step stays visible under “How is this calculated?”
- 6 Change one number at a time to see what moves the result - that is usually the most useful thing a calculator can tell you.
Worked examples
Real numbers run through this calculator. Open any example to load it into the form above and change it.
$120,000 of revenue against $84,000 of costs
An established business testing what a 12% cost increase would do to its margin.
You enter
- Revenue
- $120,000.00
- Costs
- $84,000.00
- Cost increase to test
- 12%
- Target margin
- 40%
You get
- Profit
- $36,000.00
- Profit margin
- 30.0%
- Mark-up on cost
- 42.9%
- Margin after the cost increase
- 21.6%
The profit is $36,000, which is a 30% margin on revenue and a 42.9% mark-up on cost. Every $1,000 of revenue carries $300 of profit, and costs take 70% of revenue. A 12% cost increase would take the cost to $94,080 and the margin down to 21.6%, leaving $25,920 of profit. A 40% margin would need revenue of $140,000, which is $20,000 more than the current figure.
$38,000 of revenue against $31,500 of costs
A smaller operation with a thin margin testing a more modest cost increase.
You enter
- Revenue
- $38,000.00
- Costs
- $31,500.00
- Cost increase to test
- 8%
- Target margin
- 30%
You get
- Profit
- $6,500.00
- Profit margin
- 17.1%
- Mark-up on cost
- 20.6%
- Margin after the cost increase
- 10.5%
The profit is $6,500, a margin of 17.1% and a mark-up of 20.6%, with costs taking 82.9% of revenue. An 8% cost increase raises costs to $34,020 and cuts the margin to 10.5%, leaving $3,980 of profit, which is a fall of nearly 39% from the current figure. A 30% margin would need $45,000 of revenue, which is $7,000 more than the business currently produces.
Guides that go with it
How Much of Your Salary Should Go to Rent?
You can work out a defensible rent ceiling in about fifteen minutes with nothing more than your payslip and a calculator. By the end of this guide you will know your gross and take-home pay, the rent…
How Much Does It Cost to Drive 100 Miles?
A hundred miles is a nice round trip to price out: one weekend outing, one leg of a longer journey, one week of commuting. By the end of this guide you will be able to work out your own cost for that…
How Much Can You Save by Paying Off Debt Early?
Paying extra toward a loan feels good. But how much does it actually save? In about ten minutes, you can work out the real number for your own debt: how many months you would cut, how much interest yo…
Frequently asked questions
Is the mark-up the same as the margin?
No, and the difference is the whole reason both figures are on the page. The margin divides profit by revenue, so it is profit as a share of what you sold. The mark-up divides the same profit by the cost, so it is profit as a share of what you spent, and it is always the larger of the two.
Revenue of $120,000 on costs of $84,000 is $36,000 of profit, a 30% margin and a 42.9% mark-up. A 100% mark-up is a 50% margin, not a 100% margin, and that conversion is where pricing goes wrong.
Which costs belong in the cost figure?
Only the costs of what you actually sold, if you want a gross margin: materials, buying in stock, packaging, delivery and payment fees. Adding rent, salaries and software turns the result into an operating profit instead, which is a different and usually more useful number for a small business.
The change matters because it cuts the margin without changing the price. Rent of $2,000 a month on $120,000 of annual revenue takes 20% straight off a 30% margin, and the page will show that as a lower margin rather than as a separate line.
What does the cost increase test tell me?
It shows how thin the margin is. A 12% rise in costs on the figures above cuts the margin from 30% to 21.6% and the profit from $36,000 to $25,920, so a supplier negotiation or a shipping increase can remove a fifth of the profit without any change in sales.
A useful habit is to run the test at the size of increase you would struggle to pass on. If a margin disappears entirely at a 20% cost rise, the business has no room for a bad year, and the fix is either a higher price or a cheaper input.
How is the revenue needed for the target margin worked out?
It divides the costs by one minus the target margin, because the margin is a share of the price rather than of the cost. Costs of $84,000 at a 40% target margin need $140,000 of revenue, which is $20,000 more than the current figure.
That revenue is not the same as profit: at $140,000 the profit is $56,000, which is exactly 40% of it. If the market will not pay the higher price, the alternative is to cut the cost base, and the same formula run backwards shows how much.
Terms used here
Short, plain-language definitions of the words this calculator uses.