Profit Margin Calculator
Calculate gross margin, net margin, and markup percentages. Compare margins vs markup, find optimal pricing, and benchmark against industry standards.
Calculate gross profit margin from revenue and cost of goods sold
Total revenue or sales
Direct costs to produce goods/services
See how your margins compare to industry averages
Multiple Calculations
Calculate gross margin, net margin, markup, and reverse pricing all in one powerful tool.
Industry Benchmarks
Compare your profit margins against industry standards across 10+ different sectors.
100% Private
All calculations happen in your browser. Your pricing and financial data never leaves your device.
How It Works
Gross Profit Margin Formula
Gross Margin = (Revenue - COGS) / Revenue × 100
Gross profit margin shows what percentage of revenue remains after covering the direct costs of producing your goods or services. Higher gross margins indicate better pricing power and production efficiency.
Net Profit Margin Formula
Net Margin = (Revenue - COGS - Expenses) / Revenue × 100
Net profit margin measures overall profitability after accounting for all expenses including operating costs, interest, and taxes. This is the ultimate measure of business profitability.
Markup Formula
Markup = (Selling Price - Cost) / Cost × 100
Markup shows how much you increase the price above your cost. A 50% markup means you sell for 1.5 times your cost. Note: A 50% markup equals only a 33.3% profit margin!
Reverse Calculation Formula
Selling Price = Cost / (1 - Desired Margin / 100)
Use this formula to find the selling price needed to achieve your desired profit margin. For example, for a 40% margin on a $60 cost: $60 / (1 - 0.40) = $100 selling price.
Example Calculation
Scenario: Product selling for $100 with $60 cost
- • Revenue = $100
- • COGS = $60
- • Gross Profit = $100 - $60 = $40
- • Gross Margin = ($40 / $100) × 100 = 40%
- • Markup = ($40 / $60) × 100 = 66.67%
- • Key insight: 66.67% markup = 40% profit margin
Frequently Asked Questions
What is the difference between profit margin and markup?
Profit margin is calculated as a percentage of the selling price: (Selling Price - Cost) / Selling Price × 100. Markup is calculated as a percentage of the cost: (Selling Price - Cost) / Cost × 100. For example, a 50% markup equals a 33.3% profit margin.
How do you calculate gross profit margin?
Gross profit margin is calculated using the formula: (Revenue - Cost of Goods Sold) / Revenue × 100. This shows what percentage of revenue remains after covering the direct costs of producing your product or service.
What is net profit margin?
Net profit margin measures profitability after all expenses: (Revenue - COGS - Operating Expenses - Other Expenses) / Revenue × 100. It shows the percentage of revenue that becomes actual profit after accounting for all costs.
What is a good profit margin?
A good profit margin varies by industry. Software companies often achieve 70-90% gross margins and 15-30% net margins, while retail typically sees 30-50% gross margins and 2-5% net margins. Use our industry benchmarks to compare your business.
How do I calculate the selling price for a desired margin?
To find the selling price for a desired profit margin, use the reverse calculation: Selling Price = Cost / (1 - Desired Margin/100). For example, for a 40% margin on a $60 cost: $60 / (1 - 0.40) = $100 selling price.
Is my business data kept private?
Yes, absolutely! All calculations happen entirely in your browser. Your revenue, cost, and pricing information is never sent to any server, ensuring complete privacy and security.