Profit Margin Calculator — Gross, Net & Operating Margin
Calculate gross profit margin, net profit margin, and markup percentage for any product or business. Enter your revenue and costs to instantly see your profitability metrics.
Essential for business owners, freelancers, and entrepreneurs to price products correctly and understand business profitability.
Free foreverNo data storedInstant resultsAccurate formula
Enter revenue and costs
Enter revenue and cost of goods to see your profit margins.
Profit margin breakdown
Gross profit margin
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Gross profit
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Net profit margin
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Net profit
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Markup percentage
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Cost ratio
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Gross vs Net Profit Margin
Gross profit margin measures profitability after subtracting the direct cost of producing goods or services (COGS). Net profit margin includes all expenses — operating costs, taxes, interest — giving a complete picture of profitability.
It varies by industry. Retail: 2-5% net margin is typical. Software/SaaS: 60-80% gross margin. Restaurants: 3-9% net margin. Manufacturing: 5-20%. Professional services: 15-40%. Compare your margins to industry benchmarks to evaluate performance.
Margin vs Markup
Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. A 40% margin equals a 67% markup. They're often confused — this calculator shows both.
Frequently Asked Questions
What is profit margin?
Profit margin is the percentage of revenue that remains as profit after costs are deducted. Gross profit margin subtracts only direct costs (COGS). Net profit margin subtracts all costs including operating expenses, taxes, and interest.
What is the difference between margin and markup?
Margin = profit ÷ revenue. Markup = profit ÷ cost. Example: cost $60, price $100, profit $40. Margin = 40/100 = 40%. Markup = 40/60 = 67%. Markup is always higher than margin for the same product.
What is a healthy gross profit margin?
Depends on industry. Software: 60-80%. Retail: 20-50%. Manufacturing: 20-35%. Restaurants: 60-70% gross (but much lower net). A healthy gross margin should comfortably cover operating expenses and still leave net profit.
How do I increase my profit margin?
Two approaches: increase revenue (raise prices, sell more) or reduce costs (negotiate better supplier rates, reduce waste, improve efficiency). Often the fastest way is to raise prices slightly — even a 5% price increase can dramatically improve margins.