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Calculate profit margin, gross profit, and markup from revenue and cost. Essential business calculator.

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Profit margin is calculated as: Margin = ((Revenue − Cost) / Revenue) × 100.

For example, if you sell a product for kr1,050 and it costs kr630: Margin = (kr1,050 − kr630) / kr1,050 × 100 = 40%.

Profit margin tells you what percentage of revenue is actual profit. Higher margins indicate more profitable products or services.

Margin is profit as a percentage of revenue (selling price). Markup is profit as a percentage of cost.

For the same kr630 cost and kr1,050 price: Margin = 40%, Markup = 66.7%. They describe the same profit differently.

Margin is always lower than markup for the same transaction. A 50% markup equals a 33.3% margin.

Good profit margins vary by industry:

Compare your margins to industry benchmarks rather than universal standards.

Senast uppdaterad: March 2026

What is the difference between gross and net profit margin?

Gross margin subtracts only direct costs (COGS). Net margin subtracts all expenses including overhead, taxes, and interest.

How do I calculate margin from markup?

Margin = Markup / (1 + Markup). For a 50% markup: 0.50 / 1.50 = 33.3% margin.

Is a higher profit margin always better?

Generally yes, but very high margins may attract competition. Some businesses succeed with low margins and high volume (e.g., Walmart).