Profit Margin Calculator

Enter your revenue and costs to see gross profit margin and net profit. Results update live as you type.

Inputs
Results
Gross Margin
Gross Profit
Net Margin
Net Profit
About Profit Margin

Profit margin measures how much of every dollar of revenue your business keeps as profit after expenses. There are two types most businesses track:

  • Gross margin — Revenue minus cost of goods sold (COGS), before operating expenses.
  • Net margin — What's left after all expenses including operating costs.

A 20% gross margin means you keep $0.20 of every $1.00 in revenue before operating costs.

Formula

Gross Margin % = (Revenue − COGS) ÷ Revenue × 100

Net Margin % = (Revenue − COGS − Operating Expenses) ÷ Revenue × 100

Typical Margins by Industry
IndustryTypical Gross Margin
Software / SaaS70–85%
Professional Services30–50%
Retail20–40%
Restaurant60–70% gross / 3–9% net
Manufacturing20–35%
Construction15–25%
Frequently Asked Questions
What's the difference between margin and markup?

Margin is calculated from revenue (what you sell for). Markup is calculated from cost (what you paid). A 50% markup on a $10 cost = $15 price = 33% margin. Use our Markup Calculator to convert between them.

Is 30% profit margin good?

30% gross margin is average for retail and reasonable for most product businesses. For services, you should aim higher — 40–60% gross margin gives you enough to cover operating costs and still profit. Net margin of 10% or more is generally considered healthy.

How do I improve my profit margin?

Two levers: raise prices (hardest psychologically but highest impact) or reduce COGS through better supplier terms, bulk purchasing, or more efficient production. Cutting operating expenses helps net margin but won't move gross margin.

Does this calculator include tax?

No — this calculates pre-tax margin. To get after-tax net margin, subtract your tax rate from the net profit figure before dividing by revenue.

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