How do I price for a target profit margin?

Divide unit cost by one minus the target margin as a decimal. For example, a $60 cost at a 40% target margin gives a $100 price before other expenses.

Homeprofit margin calculator

Profit Margin & Markup Calculator

Compare your gross margin and markup, then estimate the price needed to reach your target margin.

Selling price per unit ($)Cost per unit ($)Target profit margin (%)

Gross profit per unit

$35.00

Gross profit margin

35%

Markup on cost

53.85%

Price at target margin

$108.33

Formula and assumptions

Gross profit = selling price − unit cost. Margin = gross profit ÷ selling price. Markup = gross profit ÷ unit cost.

Planning estimate only. Results depend on the values and assumptions entered and are not accounting, tax, legal, or financial advice.

Frequently Asked Questions

Margin is profit divided by selling price. Markup is profit divided by cost. They use different denominators, so the percentages are not interchangeable.