diff --git a/tests/litellm/proxy/management_endpoints/test_cost_estimate_endpoint.py b/tests/litellm/proxy/management_endpoints/test_cost_estimate_endpoint.py
new file mode 100644
index 00000000000..440dbb93525
--- /dev/null
+++ b/tests/litellm/proxy/management_endpoints/test_cost_estimate_endpoint.py
@@ -0,0 +1,78 @@
+"""
+Tests for the /cost/estimate endpoint in cost_tracking_settings.py
+"""
+
+from unittest.mock import MagicMock, patch
+
+import pytest
+
+from litellm.proxy._types import CostEstimateRequest, CostEstimateResponse
+from litellm.proxy.management_endpoints.cost_tracking_settings import estimate_cost
+
+
+class TestCostEstimateEndpoint:
+    """Tests for the cost estimation endpoint."""
+
+    @pytest.mark.asyncio
+    async def test_estimate_cost_with_margin(self):
+        """
+        Test that cost estimation returns correct breakdown including margin.
+        """
+        mock_model_group_info = MagicMock()
+        mock_model_group_info.providers = ["openai"]
+        mock_model_group_info.input_cost_per_token = 0.00003
+        mock_model_group_info.output_cost_per_token = 0.00006
+
+        mock_router = MagicMock()
+        mock_router.get_model_group_info.return_value = mock_model_group_info
+
+        request = CostEstimateRequest(
+            model="gpt-4",
+            input_tokens=1000,
+            output_tokens=500,
+            num_requests=10,
+        )
+
+        # Base cost = 0.00003 * 1000 + 0.00006 * 500 = 0.03 + 0.03 = 0.06
+        # With 10% margin = 0.06 + 0.006 = 0.066
+        with patch("litellm.cost_calculator._apply_cost_margin") as mock_apply_margin:
+            mock_apply_margin.return_value = (0.066, 0.10, 0.0, 0.006)
+
+            with patch("litellm.proxy.proxy_server.llm_router", mock_router):
+                response = await estimate_cost(
+                    request=request,
+                    user_api_key_dict=MagicMock(),
+                )
+
+        assert response.model == "gpt-4"
+        assert response.input_cost_per_request == pytest.approx(0.03)
+        assert response.output_cost_per_request == pytest.approx(0.03)
+        assert response.margin_cost_per_request == pytest.approx(0.006)
+        assert response.cost_per_request == pytest.approx(0.066)
+        assert response.total_cost == pytest.approx(0.66)
+        assert response.total_margin_cost == pytest.approx(0.06)
+
+    @pytest.mark.asyncio
+    async def test_estimate_cost_model_not_found(self):
+        """
+        Test that 404 is raised when model is not found.
+        """
+        mock_router = MagicMock()
+        mock_router.get_model_group_info.return_value = None
+
+        request = CostEstimateRequest(
+            model="nonexistent-model",
+            input_tokens=1000,
+            output_tokens=500,
+        )
+
+        with patch("litellm.proxy.proxy_server.llm_router", mock_router):
+            from fastapi import HTTPException
+
+            with pytest.raises(HTTPException) as exc_info:
+                await estimate_cost(
+                    request=request,
+                    user_api_key_dict=MagicMock(),
+                )
+
+            assert exc_info.value.status_code == 404