Margin Calculator — Calculations & Slabs for FY 2026-27

Profit margin measures the percentage of the final selling price that is profit, while markup measures the percentage by which the cost is increased to set the selling price. For example, if an item costs $50 and sells for $100, the profit is $50. The profit margin is 50% ($50 / $100), but the markup is 100% ($50 / $50).

Gross profit margin shows how many cents of profit are kept from every dollar of sales. This margin is used to pay for overhead expenses like rent, salaries, utilities, and marketing. A healthy margin ensures that a company can cover operating costs and generate a net profit.

You can convert margin to markup using the formula: Markup = Margin / (1 - Margin). For example, if you want a 40% gross margin, your markup must be 0.40 / (1 - 0.40) = 0.6667, which is a 66.67% markup.

For e-commerce, a good gross margin is typically between 50% and 70%. Having high margins allows you to cover shipping costs, platform fees, credit card processing charges, and digital ads while remaining profitable. Brick-and-mortar retail margins are often lower, ranging from 30% to 50%.

Yes. To calculate the discounted margin, subtract the discount from your original selling price first, and then enter that final discounted price as the Selling Price in Tab 1 along with your cost.