What is the Profit Margin Calculator?

Profit margin is the percentage of revenue that remains as profit after costs are subtracted. It's one of the most important metrics in business finance — it tells you how efficiently a business converts sales into actual profit, and whether pricing covers costs with room to spare.

The Profit Margin Calculator computes gross profit, net profit, and margin percentage from revenue and cost inputs. Results are instant, and you can adjust the inputs to model different pricing or cost scenarios.

---

How to Use the Calculator

1. Enter your revenue — the total amount received from sales before any deductions.
2. Enter your cost — the total cost of producing or delivering the product or service (cost of goods sold, or COGS).
3. Add optional factors — apply a tax rate and/or discount if relevant to your scenario.
4. Read the results — the calculator shows gross profit in dollar terms and profit margin as a percentage.

---

Profit Margin Formulas

Gross profit:

Gross Profit = Revenue − Cost

Profit margin:

Profit Margin (%) = (Gross Profit / Revenue) × 100

Example: Revenue of $1,000 and costs of $600 gives a gross profit of $400 and a profit margin of 40%.

---

Types of Profit Margin

Gross profit margin — revenue minus cost of goods sold, divided by revenue. Measures how efficiently a product is produced or procured. This is what the calculator computes by default.

Operating profit margin — gross profit minus operating expenses (rent, salaries, utilities). A more complete picture of business profitability.

Net profit margin — profit after all expenses, taxes, and interest. The bottom-line percentage that shows what actually remains from each dollar of revenue.

---

What's a Good Profit Margin?

Healthy margins vary significantly by industry:

Industry	Typical gross margin
Software / SaaS	70–90%
E-commerce / retail	20–50%
Restaurants	60–70% (gross), 3–9% (net)
Manufacturing	25–35%
Consulting / services	50–80%
Grocery	20–25%

A margin that looks low in isolation might be strong for its industry. Compare against industry benchmarks rather than absolute numbers.

---

Using the Calculator for Pricing

The calculator works in reverse as a pricing tool: if you know your cost and target margin, you can find the minimum viable price.

Mark-up vs margin are not the same:

• A 50% mark-up on a $100 cost = $150 price = 33% margin
• A 50% margin target on a $100 cost = $200 price

This distinction trips up a lot of small business pricing. The calculator makes it easy to test both approaches.

---

Privacy

All calculations happen in your browser. No revenue figures, costs, or results are sent to any server or stored anywhere.