Margin Calculator — Profit, Markup & Target Price
Analyze gross margin, markup, net profit, fees, discounts, tax, overhead, break-even quantity, target prices, and pricing scenarios.
Product and order
Discounts and transaction costs
Order profit waterfall
Calculation breakdown
- Sale price after discount
- $36.00
- Product cost
- $2,000.00
- Tax collected
- $297.00
- Contribution / unit
- $14.57
Target price planner
Find a required list price and the maximum unit cost at your current price.
Compare pricing scenarios
Discount, fees, tax handling, and overhead stay shared across all three cases.
Current pricing
—Net margin
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Higher price
—Net margin
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Lower cost
—Net margin
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Profit margin calculator for real pricing costs
Analyze a product, service, marketplace listing, or wholesale order using unit cost, list price, discounts, quantity, payment fees, fixed transaction charges, order overhead, and tax handling. Gross metrics stay separate from all-in net profit so each number has a clear meaning.
Margin vs. markup
Margin divides gross profit by net sales; markup divides gross profit by product cost. A product that costs $20 and sells for $40 has a 50% gross margin but a 100% markup. The percentages are related, but they are not interchangeable.
Calculate a selling price from target margin
Choose gross margin for the standard cost-based formula, gross markup for cost-plus pricing, or net margin to account for processing fees, fixed fees, overhead, discount, quantity, and tax treatment. The planner also shows the maximum cost that still meets the target at your current price.
Discounts, payment fees, and tax
Discounts reduce the listed price before revenue is calculated. Percentage processing fees apply to the full customer payment, while a fixed fee applies once per item in this model. Added and included tax are separated from net sales because collected sales tax or VAT is treated as pass-through money.
Break-even quantity and contribution
Contribution per unit is net revenue minus unit cost and transaction fees. Break-even quantity divides order overhead by positive unit contribution and rounds up to a whole unit. If contribution is zero or negative, selling more units cannot cover the overhead.
Compare pricing scenarios
Use the scenario workspace to compare a price increase with a cost reduction while holding shared commercial assumptions constant. The result separates changes in net profit from changes in net margin, which helps expose high-revenue scenarios that still produce weak economics.
Margin and markup formulas
| Metric | Formula | Best used for |
|---|---|---|
| Gross profit | Net sales − product cost | Product economics before fees and overhead |
| Gross margin | Gross profit ÷ net sales × 100 | Share of sales retained before other costs |
| Gross markup | Gross profit ÷ product cost × 100 | Cost-plus pricing |
| Net margin | Net profit ÷ net sales × 100 | All-in order profitability |
Frequently asked questions
Is a 50% margin the same as a 50% markup?
No. At a 50% margin, profit is half of the selling price, so price is twice cost and markup is 100%. A 50% markup on cost produces a 33.33% margin.
Should sales tax be included in profit margin?
This calculator excludes collected sales tax or VAT from net sales and profit. Tax handling can differ by jurisdiction and accounting policy, so use the result for planning rather than tax filing.
Why can a profitable gross margin produce a loss?
Gross margin only subtracts product cost. Processing fees, marketplace charges, discounts, and order overhead can consume the remaining gross profit, which is why the calculator also reports net profit and net margin.
Method and sources
The standard gross-margin formula follows Shopify’s profit margin guidance. Cost-plus markup and pricing context follow Stripe’s product pricing guide. The percentage-plus-fixed fee model and fee treatment on the full transaction amount follow Stripe’s merchant discount rate overview. Actual accounting, tax, and payment-provider rules may differ.
