Discount, markup and gross profit margin calculator
Before agreeing a discount, see what happens to the amount left after direct cost. Enter one unit or service package, compare markup with margin, and check a separate target selling price.
By Invoodle · Updated · US SBA cost-planning reference reviewed October 2026
Compare one unit or service package on a consistent tax-exclusive basis, with unchanged direct cost. Gross profit here is selling price minus the entered direct cost; it excludes overheads and other omitted costs. Defaults are fictional. This tool does not calculate net profit, tax, whole-business break-even or demand. It does not read or save invoice drafts.
Formatting only. Changing currency keeps the numeric inputs and does not convert money.
Use the same unit or service package as the selling price. 0–1,000,000,000; exclude overheads for this gross-profit comparison.
Use one currency and a consistent tax-exclusive cost/price basis. 0–1,000,000,000. This tool does not determine tax treatment.
One reduction from the selling price, from 0–100%. No stacked discounts or invoice tax calculation.
0–99.99%. Used for a separate price before any discount, not a suggested margin or a business break-even calculation.
All inputs accept up to two decimals. Limits bound the arithmetic; the fictional 10% discount and 40% target are not recommendations.
One-unit pricing comparison
- Original gross profit per unit
- $50.00
- Original markup on cost
- 50.00%
- Original gross margin on price
- 33.33%
- Discount amount per unit
- $15.00
- Discounted selling price
- $135.00
- Gross profit after discount
- $35.00
- Gross margin after discount
- 25.93%
- Extra units to preserve original gross profit
- 42.86%
- Price for target gross margin before discount
- $166.67
Positive gross profit on the entered direct cost. Overheads and other omitted costs can change your overall result.
Assumes unchanged direct cost per unit, product mix and capacity; compares gross profit only, not whole-business break-even.
Discounted price is rounded first to two decimals, exact half cents up. Savings and profit use that price. Target price is separate, before discount, rounded upward when needed to meet at least the target. Percentages are displayed to two decimals.
A calculation link exposes your cost, price, discount, target and currency to recipients. Typing does not update the URL. Share only a scenario you want others to read.
Try a fictional discount comparison
Cost USD 100, original price USD 150, target margin 40%. Compare a 10% discount with a 40% discount, keeping direct cost unchanged.
Check costs beyond this one-unit comparison
The US SBA explains whole-business break-even using fixed costs and per-unit price less variable costs. This page compares entered direct cost with selling price; it has no fixed-cost or expected-unit-sales inputs. Use a separate full-cost analysis for business break-even. The reference does not endorse these defaults or a recommended margin.
Agree the price before preparing a quote
Check scope, quantities, currency, discount conditions and applicable tax treatment. The quote guide opens separately and does not transfer this calculation or send a quote. Review all figures in the document workflow before sharing.
Review the quote generatorMarkup vs margin: the denominator makes the difference
Both percentages start with the same amount: selling price minus direct cost. Markup compares that amount with cost. Gross margin compares it with selling price. Keep cost and price on a consistent tax-exclusive basis and use the same unit or service package for both.
For a fictional cost of 100 and selling price of 150, gross profit on the entered cost is 50. Markup is 50 ÷ 100 = 50%. Gross margin is 50 ÷ 150 = 33.33% when displayed to two decimals. Adding 50% to cost therefore does not create a 50% margin.
- Gross profit per unit = selling price − entered direct cost.
- Markup (%) = gross profit ÷ direct cost × 100, when cost is positive.
- Gross margin (%) = gross profit ÷ selling price × 100, when price is positive.
| Cost | Selling price | Markup on cost | Gross margin on price |
|---|---|---|---|
| 100 | 125 | 25% | 20% |
| 100 | 150 | 50% | 33.33% |
| 100 | 200 | 100% | 50% |
How to calculate a discount and the profit left after it
A percentage discount reduces the selling price while this model keeps direct cost unchanged. Discounted price = original price × (1 − discount percentage ÷ 100). The tool rounds that payable price to two decimals first, with exact half cents up. It then subtracts the rounded price from the original price to get the discount amount, and subtracts cost from the rounded price to get profit after discount.
For cost USD 100 and price USD 150, a 10% discount gives a USD 135 price and USD 35 gross profit instead of USD 50. The USD 15 reduction is 30% of the original profit. Gross margin after discount is 35 ÷ 135 = 25.93%, while the markup and margin shown for the original price remain separate.
At a 40% discount the price becomes USD 90, below the USD 100 cost. Each unit then adds a USD 10 loss on the entered direct cost. The example does not predict whether a lower price would increase sales.
| Discount | Selling price after discount | Gross profit per unit | Gross margin |
|---|---|---|---|
| 0% | USD 150.00 | USD 50.00 | 33.33% |
| 10% | USD 135.00 | USD 35.00 | 25.93% |
| 40% | USD 90.00 | −USD 10.00 | −11.11% |
How much more would you need to sell after a discount?
When original and discounted gross profit per unit are both positive, extra units (%) = (original profit ÷ discounted profit − 1) × 100. In the USD 100 cost and USD 150 price example, a 10% discount changes profit from USD 50 to USD 35. Preserving the original total gross profit requires 50 ÷ 35 times as many units, or about 42.86% more.
This comparison assumes unchanged direct cost per unit, product mix and capacity. It does not include new overheads, extra staffing, fulfilment limits or a forecast that those sales will happen. For a real whole-unit sales target, use your starting quantity and round the required quantity upward separately; this calculator displays a percentage only.
If discounted profit is zero, no finite number of those units restores an original positive profit. If it is negative, each additional unit adds a loss. If original profit is already zero or negative, the tool marks the comparison as not applicable rather than presenting a positive-profit recovery target.
Selling price for a target gross margin
For positive cost and a target below 100%, price = cost ÷ (1 − target margin percentage ÷ 100). A cost of 60 and a 40% target gives a price of 100. Adding 40% to cost would give 84, which is a markup calculation and produces a different margin.
The target price is a separate price before any discount. It does not automatically replace the original selling price or include the discount input. When the formula produces a fraction of a cent, the tool rounds the price upward so the cent-denominated result meets at least the chosen target. For cost USD 100 and a 40% target, it shows USD 166.67.
A 0% target with positive cost returns cost, leaving zero profit on that cost. It does not cover omitted overheads. With zero cost, any positive selling price has 100% margin and a zero selling price has undefined margin, so no exact target price for a margin below 100% is shown.
Gross profit, zero denominators and business break-even
Gross profit on entered direct cost is only one part of a business result. Rent, software, admin time and other costs omitted from this input still need review. The US SBA describes whole-business break-even using fixed costs divided by selling price less variable cost per unit. This calculator has no fixed-cost or expected-unit-sales inputs and does not calculate that business break-even point.
A selling price of zero makes gross margin undefined because the denominator is zero. A cost of zero makes markup undefined for the same reason. Negative profit and negative margin remain visible when price is positive but below cost. Undefined is not the same as a genuine 0% result.
Before preparing a quote, check the scope, quantities, cost basis, discount conditions and tax treatment that apply. There is no universal healthy-margin percentage supplied here. The general invoice editor calculates its document-level tax and discount separately; this standalone comparison does not establish the correct invoice tax base or transfer its figures to a document.
One-unit gross-profit arithmetic with unchanged direct cost, not net profit or whole-business break-even. Defaults are fictional. US SBA cost-planning context reviewed October 2026; tax treatment and accounting classification need separate review.
Frequently asked questions
What is the difference between markup and gross margin?
Markup divides gross profit by direct cost; gross margin divides it by selling price. At a cost of 100 and price of 150, profit is 50, markup is 50% and margin is 33.33% when displayed to two decimals. Both percentages depend on using a consistent cost and price basis.
How do I calculate profit after a discount?
Multiply original price by one minus the discount percentage, round that payable price to two decimals, then subtract direct cost. For cost 100, price 150 and a 10% discount, the price is 135 and gross profit is 35. This calculator holds direct cost per unit unchanged and does not calculate net profit or tax.
How much extra volume would preserve profit after a discount?
When both per-unit profits are positive, divide original profit by discounted profit and subtract one, then multiply by 100. A change from 50 to 35 profit per unit requires about 42.86% more units. Zero or negative discounted profit cannot restore an original positive profit at any finite volume under these assumptions.
How do I find a selling price for a target margin?
For positive cost, divide cost by one minus the target margin percentage. The target must be below 100%. Cost 60 and a 40% target gives price 100. This calculator rounds the target price upward to cents when needed and applies no discount to that separate target price.
Why does the calculator show undefined instead of 0%?
Markup is undefined when cost is zero, and gross margin is undefined when selling price is zero, because division by zero is not defined. A zero profit with a positive denominator is a genuine 0%. With zero cost and a positive price, margin is 100% and no exact target price for a margin below 100% is shown.
Is the target-margin price my business break-even price?
No. It is a price calculated from one entered direct cost and a chosen gross margin. Whole-business break-even also needs a review of fixed and variable costs and sales volume. A positive gross profit here does not establish net profit or that all business costs are covered.
Can I share the result or create a quote from it?
Copy calculation includes inputs, results, rounding and assumptions. Copy calculation link exposes cost, price, discount, target and currency to recipients; typing does not update the URL. The quote generator opens separately without transferring these values or sending a quote. Review the document figures and tax treatment before sharing.