Margin: profit as a share of price

Margin is profit as a share of the selling price: (price − unit cost) ÷ price × 100%.

Formula

Margin = (price − unit cost) ÷ price × 100%

The denominator is selling price, so margin cannot exceed 100%. Markup uses unit cost as its denominator and can exceed 100%.

Price — selling price (₽)
Unit cost — variable cost per unit (₽)

Worked example

Price: 5 000 ₽
Unit cost: 3 000 ₽

Profit = 5,000 ₽ − 3,000 ₽ = 2,000 ₽
margin = 2,000 ₽ ÷ 5,000 ₽ × 100%

Result: 40%.

How to interpret it

Margin shows the share of each currency unit of revenue left after unit cost.
A 0% margin means selling at cost; a negative margin means variable-cost loss per sale.

Common mistakes

Calculating margin from unit cost; that is markup.
Expecting margin to exceed 100%.
Replacing unit cost with total cost including fixed costs.

Calculate with your own data

Open “Margin and markup” with an example

The calculation runs in your browser; the example link restores its values in the calculator. Our calculation methodology documents formula versions, units and rounding.

Editorial team: MARKMA Editorial Team. Reviewed: 2026-09-25.