Short answer
There is no fixed limit. A seller may charge any price the buyer freely agrees to, and the Prophet ﷺ approved a 100% profit and refused to fix prices in the market. What is forbidden is deceiving the buyer about the value, exploiting someone's desperation, hoarding to push prices up, and gouging on necessities.
Profit is not capped in the Shariah; the price is what the two parties agree. Deception (taghrir) that leads to a grossly unfair price gives the cheated party the right to cancel. The ruler should not fix prices unless traders grossly exceed fair value in necessities and harm the public.
The four schools agree on this.
Explanation
A common claim is that Islam limits profit to a third, or to some other percentage. There is no such rule in the Quran or Sunnah. Urwah al-Bariqi was given one dinar by the Prophet ﷺ to buy a sheep; he bought two, sold one for a dinar and came back with a sheep and the dinar. The Prophet ﷺ prayed for blessing in his trade. When prices rose in Madinah and people asked him to set prices, he said Allah is the one who sets prices, and that he hoped to meet Allah with no one claiming he had wronged them.
So a high margin is not haram in itself. A seller may charge more for quality, convenience, brand, risk or effort. The limits come from honesty and fairness:
- No deception. Lying about cost, origin or quality to justify a price is haram. Hanafi jurists give the buyer the right to cancel when he was deceived into a grossly unfair price.
- No exploiting need. Charging a stranded or desperate person many times the normal price is against the mercy the Prophet ﷺ taught: Allah has mercy on the one who is easygoing when he sells.
- No hoarding to create shortages. See Is hoarding haram?
- Price controls in necessities. In the Hanafi school the authorities may step in when traders of staple goods exceed fair value grossly and harm the public.
In murabaha, where the seller tells the buyer his cost, the cost must be stated truthfully. For the basic rules of trade, see What are the rules of business in Islam?
The evidence
Quran, Surah An-Nisaa 4:29
يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوا۟ لَا تَأْكُلُوٓا۟ أَمْوَٰلَكُم بَيْنَكُم بِٱلْبَٰطِلِ إِلَّآ أَن تَكُونَ تِجَٰرَةً عَن تَرَاضٍۢ مِّنكُمْ ۚ وَلَا تَقْتُلُوٓا۟ أَنفُسَكُمْ ۚ إِنَّ ٱللَّهَ كَانَ بِكُمْ رَحِيمًۭا ﴿٢٩﴾
O you who have believed, do not consume one another's wealth unjustly but only [in lawful] business by mutual consent. And do not kill yourselves [or one another]. Indeed, Allah is to you ever Merciful.
The price is what both sides freely agree.
Quran, Surah Ash-Shu'araa 26:183
وَلَا تَبْخَسُوا۟ ٱلنَّاسَ أَشْيَآءَهُمْ وَلَا تَعْثَوْا۟ فِى ٱلْأَرْضِ مُفْسِدِينَ ﴿١٨٣﴾
And do not deprive people of their due and do not commit abuse on earth, spreading corruption.
Cheating people of fair value is condemned.
Sahih al-Bukhari 3642
Sahih... فدعا له بالبركة في بيعه ...
"So he prayed for blessing for him in his trade."
A 100% profit made honestly was approved and blessed.
Sunan Abi Dawud 3451
Grading to be checked... إن الله هو المسعر القابض الباسط الرازق ...
"Allah is the one who sets prices, who withholds and gives in plenty, the Provider."
The Prophet ﷺ declined to fix market prices.
Sahih al-Bukhari 2076
Sahih... رحم الله رجلا سمحا إذا باع وإذا اشترى وإذا اقتضى ...
"May Allah have mercy on a man who is easygoing when he sells, when he buys and when he asks for repayment."
Fairness and leniency in pricing are praised.
Where the ruling is recorded
- al-Hidaya, Kitab al-Karahiya, section on sale (fasl fi al-bay'). The ruler should not fix prices unless traders grossly exceed fair value to the public's harm.
- Radd al-Muhtar (Ibn Abidin), Kitab al-Buyu', Bab al-Murabaha wa al-Tawliya, on gross loss (ghabn fahish) with deception. The deceived party may cancel a sale at a grossly unfair price.
Checked by our team. For a more accurate answer to your own situation, consult a scholar. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.