Profit Margin Calculator
Enter your revenue and costs to calculate gross profit margin and net profit. Results update instantly.
Calculate Your Margin
What is 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.
Profit Margin Formula
Gross Margin % = (Revenue − COGS) ÷ Revenue × 100
Net Margin % = (Revenue − COGS − Operating Expenses) ÷ Revenue × 100
What is a Good Profit Margin?
| Industry | Typical Gross Margin |
|---|---|
| Software / SaaS | 70–85% |
| Professional Services | 30–50% |
| Retail | 20–40% |
| Restaurant | 60–70% gross / 3–9% net |
| Manufacturing | 20–35% |
| Construction | 15–25% |
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.