Calculate profit margin, markup, selling price, and break-even quantity for your business.
Quick Answer:Profit margin is the percentage of revenue that remains as profit after costs. In 2026, a healthy gross profit margin varies by industry: retail averages 25-50%, restaurants 3-9%, software 70-90%, and manufacturing 25-35%. A product selling for $100 with $60 cost has a 40% profit margin.
Profit Margin
Calculating... gross margin
Markup %
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Gross Profit
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Revenue
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Cost
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Break-Even Quantity
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| Margin | Markup | Multiplier |
|---|---|---|
| 15% | 17.6% | 1.176x |
| 25% | 33.3% | 1.333x |
| 30% | 42.9% | 1.429x |
| 40% | 66.7% | 1.667x |
| 50% | 100% | 2.000x |
| 75% | 300% | 4.000x |
A common mistake is confusing margin with markup. If you want a 40% profit margin, you need a 66.7% markup on cost -- not 40%. Many businesses leave money on the table by using margin and markup interchangeably. In 2026, with rising costs, regularly recalculating your margins and adjusting prices quarterly is essential. Also consider that a 1% improvement in pricing typically yields an 8-11% increase in operating profit for most businesses.
Profit margin is the percentage of revenue that is profit (Profit / Revenue x 100), while markup is the percentage added to cost to get the selling price (Profit / Cost x 100). For example, a product costing $60 sold for $100 has a 40% margin but a 66.7% markup. Margin is always lower than markup for the same transaction.
A good profit margin varies by industry. In 2026, healthy gross profit margins are: retail 25-50%, restaurants 3-9%, software/SaaS 70-90%, manufacturing 25-35%, consulting/services 50-70%, and e-commerce 40-65%. Net profit margins are typically 10-20% for healthy businesses across most industries.
To find the selling price from cost and desired margin, use: Price = Cost / (1 - Margin/100). For example, if your cost is $60 and you want a 40% margin: Price = $60 / (1 - 0.40) = $60 / 0.60 = $100. Do not simply add the margin percentage to cost, as that calculates markup, not margin.