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Tool

Gross margin calculator

Connectica calculators · runs entirely in your browser

Gross margin—Profit per unit—Markup—

Estimates only — computed locally, no data leaves this page. Verify anything that matters with your accountant, lender or the CRA.

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Gross margin calculator — Connectica

A 40 percent markup is not a 40 percent margin — it is a 28.6 percent margin. The difference compounds through every pricing conversation you will ever have.

Markup versus margin

Markup is profit divided by COST: a $87 profit on a $62 cost is a 140 percent markup. Margin is profit divided by PRICE: the same dollar is a 58 percent margin. Investors, accountants and banks speak margin. Most sales teams speak markup. Knowing both conversions fluently prevents the classic mis-pricing disasters.

Frequently asked questions

What gross margin should a software company target?

Healthy SaaS products run 70–85 percent gross margin. Below 60 percent usually means services revenue is hiding inside 'product' revenue — worth unpacking before a fundraise.

Connectica provides information only, not financial, investment, legal or tax advice. Figures on this page are estimates and generalizations — confirm anything that matters with the relevant professional or authority.