Business & pricing
Profit Margin Calculator
Know exactly how much you earn on each item. Enter what an item costs you and what you sell it for, and get the profit in rupees, the profit margin and the markup.
How to use the Profit Margin Calculator
- Enter the cost price (what you pay).
- Enter the selling price (what the customer pays).
- Optionally enter how many units you sold to see total profit.
Formula
Example
You buy a shirt for Rs 800 and sell it for Rs 1,000. Profit is Rs 200, the margin is 20% and the markup is 25%.
Why margin matters more than profit per item
Rs 50 profit on a Rs 100 item is a 50% margin. Rs 50 profit on a Rs 2,000 item is only 2.5%. Margin tells you how much of every rupee of sales you keep, so you can compare products and decide which ones deserve shelf space and promotion.
What to include in cost price
- The purchase price from the supplier
- Freight, loading and carriage to your shop
- Packing and labels
- Any tax you cannot claim back
- Breakage or expiry, as an average per unit
Margin targets in common trades
Grocery and FMCG shops in Pakistan often run on thin margins of around 5–15% and make money on volume. Garments, cosmetics, mobile accessories and services usually need much higher margins to cover rent, staff and slow stock. Use the calculator on your own figures, then compare with traders in your line.
From margin to monthly profit
Your gross profit is not what you take home. Subtract rent, salaries, electricity, internet and other fixed costs from total profit to see your net profit. The break-even calculator shows how many units you must sell to cover those costs.
Read the guide
Related free tools
Frequently asked questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price. Markup is profit as a share of the cost. The same Rs 200 profit is a 20% margin but a 25% markup.
What is a good profit margin?
It depends on the trade. Grocery stores often work on 5–15%, while clothing and services can be much higher. Compare with others in your line of business.
What is a 30% margin on Rs 700 cost?
The selling price is Rs 700 ÷ (1 − 0.30) = Rs 1,000. Profit is Rs 300, which is 30% of the selling price.
Can margin be more than 100%?
No. Margin is profit as a share of the price, so it is always below 100%. Markup can be more than 100%.
Results are estimates for planning. For tax, legal or religious decisions, confirm with a qualified person. Your inputs stay in your browser and are not sent to Soft2Cloud.