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Selling price
Calculate your selling price, profit, margin and markup from cost or billable hours – all results update as you type.
When cost is time, guessed hours make guessed margins. AI Time Tracker records your billable hours automatically — so the margin you quote is the margin you keep. Free for Mac and Windows.
Profit margin is the share of the selling price you keep:
margin = (revenue − cost) ÷ revenue × 100
Sell for $100 what cost you $80: profit $20, margin 20%. To work backwards from a target margin, the price is: revenue = cost ÷ (1 − margin) — with a 20% margin on an $80 cost, the price is $80 ÷ 0.8 = $100, not $96.
Watch out: many "margin calculators" online quietly compute markup instead (cost × 1.2 = $96). The 4-point gap between $96 and $100 is exactly the margin-versus-markup confusion, and it scales with every sale. This page always shows both figures side by side so the difference is visible on every number you type.
Both express the same profit as a percentage, but from a different base:
A 25% markup produces only a 20% margin. If you aim for a 50% margin and price with a 50% markup, your real margin is 33% — and the missing 17 points never appear on the invoice. Use the conversion table below to map between the two, and the markup calculator for the markup-first view.
| Markup | Margin |
|---|---|
| 5% | 4.8% |
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 40% | 28.6% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50.0% |
| 150% | 60.0% |
| 200% | 66.7% |
Rule of thumb: margin = markup ÷ (1 + markup). For values not listed, the calculator above computes both at once.
Margins vary by orders of magnitude between sectors. Benchmarks help you sense-check your pricing — but margin without accurate cost is decoration. When your cost is labor, the margin is only as real as the hours behind it.
| Industry | Typical gross margin |
|---|---|
| Software / SaaS | 70–85% |
| Consulting / agencies | 25–50% |
| Construction | 20–35% |
| Manufacturing | 15–25% |
| Retail | 20–50% |
| Restaurants | 3–5% net |
| Grocery | 1–3% net |
Agencies and consultancies sit high on the gross-margin table because their cost is time — which is also why a miscalculated hour count lands directly on the margin. The free AI Time Tracker records your hours automatically, so the margin in your quote is the margin in your books.
Profit margin is the percentage of the selling price that remains as profit after costs. Sell for $100 what cost $80 and your margin is 20% — $20 profit out of $100 revenue.
margin = (revenue − cost) ÷ revenue × 100. Backwards from a target margin, price = cost ÷ (1 − margin). Note that cost × (1 + margin) is the markup formula, not the margin formula — mixing them is the most common pricing error.
Margin divides profit by revenue; markup divides profit by cost. A 25% markup equals a 20% margin. See the conversion table above, or use the markup calculator for the markup-first workflow.
It depends on the industry. SaaS commonly runs 70–85% gross margin, retail 20–50%, restaurants 3–5% net. What matters most: whether the margin covers your overhead with room for profit — and whether the cost behind it is real, not estimated.
Gross margin counts only direct costs (cost of goods, direct labor); net margin also subtracts overhead, marketing, shipping and taxes. This calculator computes gross margin from the inputs you give it — include your overhead inside "cost" to approximate net margin.
Multiply your hourly rate by the hours to get cost, then divide by (1 − margin) to get the price. $50/hour for 8 hours is a $400 cost; a 40% margin prices the work at $666.67 and yields a $83.33 effective rate. The Time-based tab computes this as you type — and the free AI Time Tracker keeps the hour count real.
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For freelancers and agencies, cost is time. AI Time Tracker records every billable hour automatically – so your cost, margin and markup are always based on real data. Download the free app for your Mac or Windows computer.