Profit Margin Calculator

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Profit Margin Calculator

Calculate gross profit, gross margin, net profit, net margin and markup from revenue, cost of goods sold and operating expenses. Free, instant, no signup.

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Profit margin is profit as a percentage of revenue. Gross margin = (revenue - cost of goods sold) / revenue; net margin also subtracts operating expenses. With $100,000 revenue and $35,000 cost of goods sold, gross margin is 65%. Markup is different: it divides profit by cost, so the same numbers give a 185.7% markup.

Runs entirely in your browser · no signup · nothing is uploaded · updated 2026-10-29

Gross profit
$65,000
Gross margin
65%
Net profit
$25,000
Net margin
25%
Markup on cost
185.71%

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How to use it

  1. 1.Enter revenue for the period.
  2. 2.Enter cost of goods sold - what it costs to deliver what you sold.
  3. 3.Add operating expenses to see net profit and net margin alongside gross margin and markup.

Margin and markup formulas

Margin divides by revenue, markup divides by cost. Mixing them up is the most common pricing mistake.

MetricFormulaWorked example
Gross profitRevenue - COGS$100,000 - $35,000 = $65,000
Gross marginGross profit / revenue$65,000 / $100,000 = 65%
Net margin(Revenue - COGS - expenses) / revenue$25,000 / $100,000 = 25%
MarkupGross profit / COGS$65,000 / $35,000 = 185.7%
Price for a target marginCost / (1 - margin)$35 / (1 - 0.65) = $100

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Free to use on any blog, class page or wiki. Paste the snippet and keep the credit line under it.

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<iframe src="https://rankcert.com/embed/profit-margin-calculator" title="Profit Margin Calculator" width="100%" height="600" style="border:0;border-radius:12px" loading="lazy"></iframe>
<p style="font-size:13px">Free <a href="https://rankcert.com/tools/profit-margin-calculator">profit margin calculator</a> by RankCert</p>

Frequently asked questions

What is a good profit margin?

It varies by industry. Software companies often run 70 to 90 percent gross margins; retail is usually 20 to 50 percent. For net margin, 10 percent is solid for most small businesses and 20 percent is strong.

What is the difference between margin and markup?

Margin is profit divided by the selling price; markup is profit divided by cost. A product that costs $60 and sells for $100 has a 40% margin and a 66.7% markup.

What goes into cost of goods sold for a SaaS business?

Costs that scale with delivering the product: hosting, third-party APIs, payment processing and customer support. Sales, marketing and R&D are operating expenses, not COGS.

How do I price for a target margin?

Divide cost by one minus the target margin. To hit a 40% margin on a $60 cost, price at $60 / 0.6 = $100. Adding 40% to cost gives $84, which is only a 28.6% margin.

Can profit margin be negative?

Yes. A negative margin means costs exceed revenue for the period. Early startups often run negative net margins while gross margin is positive and improving.

Gross margin or net margin - which matters more?

Both answer different questions. Gross margin shows whether the product itself makes money per sale; net margin shows whether the whole business does after paying for growth and overhead.

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