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Contribution Margin Calculator

Find how much of each sale is left after variable costs to cover fixed costs and profit.

About Contribution Margin Calculator

Margin divides profit by revenue; markup divides the same profit by cost. They are routinely confused, so both are shown — a 50% margin is a 100% markup. Margin is what funds every fixed cost in a product business, and mispricing by a few points is the difference between scaling profitably and scaling losses.

Formula

Contribution Margin

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

Selling price per unit
Money received
Variable cost per unit
Direct cost of delivering it

Worked example

With the default values below, Contribution Margin Calculator returns Contribution Margin of 62.50%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Selling price per unitminimum 0
120
Variable cost per unitminimum 0
45

Results

Contribution Margin
62.50%
Profit
$75.00
Markup on Cost
166.67%
Cost as Share of Revenue
37.50%

Step by step

  1. 1Values used
  2. 2Contribution Margin
  3. 3Contribution Margin= 62.50
  4. 4Profit= 75.00
  5. 5Markup on Cost= 166.67
  6. 6Cost as Share of Revenue= 37.50

Assumptions and limits

  • The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Contribution Margin calculated?

Margin % = (Selling price per unit − Variable cost per unit) ÷ Selling price per unit × 100 Margin divides profit by revenue; markup divides the same profit by cost. They are routinely confused, so both are shown — a 50% margin is a 100% markup.

Why does Contribution Margin matter?

Margin is what funds every fixed cost in a product business, and mispricing by a few points is the difference between scaling profitably and scaling losses.

What values do I need to enter?

This calculator takes 2 inputs: Selling price per unit, Variable cost per unit. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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