Profit Margin Calculator

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Calculate your gross profit margin, net profit and markup instantly. Free, no sign-up required.

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What is profit margin?

Profit margin is the percentage of revenue that remains as profit after subtracting costs. It’s one of the most important indicators of business health — showing how efficiently a company turns revenue into actual profit.

There are two main types: gross profit margin (revenue minus cost of goods sold) and net profit margin (revenue minus all expenses including operating costs and taxes).

Gross Profit Margin = (Revenue − COGS) ÷ Revenue × 100
Net Profit Margin = (Revenue − COGS − Expenses) ÷ Revenue × 100
Markup = (Revenue − COGS) ÷ COGS × 100

Example: if you sell a product for $100 and it costs $57.50 to produce, your gross profit is $42.50 and your gross margin is 42.5%.

How to use this calculator

Enter your total revenue (all sales before any deductions) and your cost of goods sold — the direct costs to produce or deliver your product. The calculator instantly shows your gross profit margin, markup, and how you compare to industry benchmarks.

Frequently Asked Questions

What is a good profit margin?
It depends on the industry. SaaS companies often achieve 60–80% gross margins. Retail typically runs 20–50%. Restaurants are much thinner at 3–9%. As a general rule, above 20% gross margin is considered healthy for most businesses.
What's the difference between gross and net profit margin?
Gross margin only subtracts the direct cost of producing goods (COGS). Net margin subtracts everything — COGS, operating expenses, interest, and taxes. Net margin gives you the true picture of profitability after all costs are paid.
How do I improve my profit margin?
You can improve margins in two ways: increase revenue (raise prices, sell more volume, upsell) or reduce costs (negotiate better supplier rates, reduce waste, improve operational efficiency). Raising prices is often faster but requires strong positioning.
What is the difference between margin and markup?
Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. A 50% markup means you added 50% on top of cost, which results in a 33.3% margin. They measure the same profit from different angles.