Profit Margin
Calculator
Pre-filled with AED 100 cost and AED 150 price — your margin, markup and profit are already showing side by side, so you never confuse the two again.
Your numbers
A 50% markup on cost is only a 33% margin on price — they're never the same number except at 0%. This tool shows both, always.
MARGIN VS MARKUP
AED 50 profit per unit
PER-UNIT BASIS · UAE 9% CORPORATE TAX SHOWN SEPARATELY
What price hits your target margin?
Uses the cost from your setup above — the right way to price, not cost-plus guessing
Price = cost ÷ (1 − margin). Adding "40% to cost" instead would only give a 28.6% margin.
Typical gross margins by industry
Compare your number to businesses like yours, not a universal rule of thumb
Three pricing mistakes this tool catches
Where founders lose money without noticing
Frequently Asked Questions
Margin and markup, explained plainly
What is the difference between margin and markup?
Markup is profit divided by cost; margin is profit divided by selling price. They're always different: a 50% markup on a AED 100 cost gives a AED 150 price, but that's only a 33% margin, not 50%. Confusing the two is one of the most common pricing mistakes — this calculator shows both from the same numbers.
How do I calculate profit margin from cost and price?
Profit = selling price − cost. Margin % = profit ÷ selling price × 100. For example, AED 150 price − AED 100 cost = AED 50 profit, and AED 50 ÷ AED 150 = 33.3% margin. Markup %, by contrast, is AED 50 ÷ AED 100 cost = 50%.
What is a good profit margin for a business in the UAE?
It varies widely by industry: retail and e-commerce often run 20–40% gross margin, food and beverage 60–70% (before rent and labour), professional services 40–60%, and wholesale/distribution as low as 10–20%. Compare your margin to others in your specific industry rather than a universal benchmark.
Does UAE corporate tax apply to my profit margin?
The UAE's 9% corporate tax applies to net taxable profit above AED 375,000 per year, not to your gross margin on each sale — most small businesses under that threshold pay no corporate tax at all. Free zone companies meeting qualifying-income conditions can retain a 0% rate on qualifying activities.
Why is my margin lower than expected even though sales are good?
Gross margin only covers cost of goods sold — it excludes overheads like rent, salaries, marketing and card/payment fees. A healthy 40% gross margin can still produce a thin or negative net margin if fixed costs are high; check your break-even point alongside your margin.
How do I price a product to hit a target margin?
Price = cost ÷ (1 − target margin as a decimal). For a AED 100 cost and a 40% target margin: 100 ÷ (1 − 0.40) = AED 166.67. This is different from simply adding 40% to cost (which gives a 40% markup, only a 28.6% margin) — the target-price tool below does this calculation for you.
Want a proper look at your numbers?
Accounting firms can review pricing, margins and cash flow with you.