Profit Margin Calculator
Type in your revenue and costs. Get gross, operating, and net margin — instantly, in your browser, with the formulas right next to the numbers.
Your numbers
The money you brought in from sales, before any deductions.
Direct cost to produce or buy what you sold: materials, manufacturing, shipping in.
Rent, salaries, ads, software, utilities — everything to run the business.
Income tax (and any other non-operating taxes) for the period.
Your margins
Gross profit
Revenue − COGS
$6,000.00
Operating profit
Gross profit − Operating expenses
$4,000.00
Net profit
Operating profit − Taxes
$3,400.00
Also useful
(Revenue − COGS) ÷ COGS
How profit margin works
Profit margin is the percentage of revenue you keep as profit. There are three flavors, and confusing them is the most common business-math mistake we see:
Gross margin
(Revenue − COGS) ÷ Revenue × 100
Only subtracts direct production costs. Useful for pricing individual products.
Operating margin
(Revenue − COGS − OpEx) ÷ Revenue × 100
Also subtracts rent, salaries, software, and advertising. Shows how efficiently the business runs.
Net margin
Net profit ÷ Revenue × 100
The bottom line — after taxes and everything else. What you actually keep per dollar of sales.
Quick example
A coffee shop makes $10,000 in sales. COGS (beans, milk, cups) is $4,000. Operating expenses (rent, baristas, electricity) is $2,000. Taxes are $600.
- • Gross profit: $6,000 → 60% gross margin
- • Operating profit: $4,000 → 40% operating margin
- • Net profit: $3,400 → 34% net margin
What's a good profit margin?
| Industry | Typical net margin |
|---|---|
| Software / SaaS | 15% – 35% |
| Professional services / Agencies | 10% – 20% |
| E-commerce (D2C brand) | 5% – 12% |
| Restaurants | 3% – 8% |
| Retail (general) | 2% – 6% |
| Grocery | 1% – 3% |
Benchmarks are rough industry-wide medians. Your sub-niche may differ.
Frequently asked questions
What is a good profit margin?▼
It depends heavily on industry. As rough benchmarks: 5% net margin is low, 10% is average, 20%+ is high. Software/SaaS routinely hits 20–40% net. Retail and restaurants often run 2–6%. Compare yourself to your sector, not the average across all businesses.
What's the difference between gross, operating, and net margin?▼
Gross margin only subtracts the direct cost of goods sold (COGS). Operating margin also subtracts the cost of running the business (rent, salaries, ads). Net margin further subtracts taxes and any non-operating costs — it's the bottom line, the money you actually keep.
How do I calculate profit margin?▼
Margin = (Revenue − Costs) ÷ Revenue × 100. For gross margin, costs = COGS. For operating margin, costs = COGS + operating expenses. For net margin, include taxes too.
What's the difference between margin and markup?▼
Markup is profit as a percentage of cost. Margin is profit as a percentage of revenue. A 50% markup on a $10 cost gives a $15 sell price — but that's only a 33% margin. They are not interchangeable, and confusing them is the #1 pricing mistake.
Does this calculator save my data?▼
No. All calculations happen in your browser. Nothing you type is transmitted, logged, or stored on any server.