Profit margin calculator
Enter your revenue and costs to see gross profit, gross margin, markup and net margin.
Free to use, no account needed. What you type stays in your browser.
Gross margin
40%
Gross profit
$400.00
Markup
66.67%
Where your revenue goes
- Cost of goods sold$600.00 (60%)
- Net profit$400.00 (40%)
How this is calculated
Profit margin shows how much of each sale you keep as profit. These are the formulas used:
- Gross profit
- R − C
- Gross margin
- (R − C) ÷ R × 100
- Markup
- (R − C) ÷ C × 100
- Net profit (before tax)
- R − C − E
- Net margin (before tax)
- (R − C − E) ÷ R × 100
R is revenue, C is the cost of goods sold and E is your other expenses.
Margin and markup are not the same. Margin is profit as a share of the selling price; markup is profit as a share of the cost. A 50% markup equals a 33.3% margin.
Use the same currency and the same period for every number (for example one month). Revenue should be after discounts and returns. Net profit here is before tax and interest.
Worked example
With revenue of $1,000.00, a cost of goods sold of $600.00 and other expenses of $250.00, gross profit is $400.00 (a gross margin of 40% and a markup of 66.67%). Net profit is $150.00, a net margin of 15%.
Profit margin questions
What is the difference between margin and markup?
Margin is profit divided by the selling price. Markup is profit divided by the cost. They use the same profit but different bases, so for a profitable sale markup is always a bigger number than margin (a 50% markup equals a 33.3% margin).
How do I calculate gross profit margin?
Subtract the cost of goods sold from revenue to get gross profit, divide it by revenue and multiply by 100. For example, revenue of 1000 and a cost of 600 give a gross profit of 400 and a gross margin of 40%.
What is the difference between gross margin and net margin?
Gross margin only subtracts the direct cost of what you sold. Net margin also subtracts your other expenses, such as rent, salaries and marketing, so it shows what is left as real profit. In this calculator net profit is before tax and interest.
What is a good profit margin?
It depends on the industry, the size of the business and the product. Compare your margin with similar businesses and with your own past results instead of using one number for everyone.
Is my information stored or sent anywhere?
No. The calculation runs in your browser. The numbers you enter are not sent to us or saved.
Related calculators
- Pricing calculatorWork out the selling price that covers your costs and fees and gives the profit margin or markup you want.
- Break-even calculatorFind how many units you must sell to cover your costs. Add a target profit to see how many you need to earn it.
- ROI calculatorEnter the amount you invested and its final value to see your return on investment. Add a time period to see the annualized return.
Results are estimates for planning. They are not financial, tax or religious advice.