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Profit Margin Calculator
Calculate gross, operating, and net profit margin. Enter your revenue and costs below.
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Profit margin formulas
- Gross Margin % = (Revenue − COGS) / Revenue × 100
- Net Margin % = Net Income / Revenue × 100
- Operating Margin % = Operating Income / Revenue × 100
- Markup % = (Revenue − COGS) / COGS × 100
Margin vs markup - what's the difference?
Margin is calculated as a percentage of selling price. Markup is calculated as a percentage of cost. A 50% markup gives you a 33% margin. They are not interchangeable.
What is a good profit margin?
It varies significantly by industry. Software SaaS companies often achieve 60–80% gross margins. Retail averages 20–40%. Restaurants are typically 3–9% net margin. Always compare against your industry benchmark.
Frequently asked questions
Can profit margin be negative?
Yes - a negative margin means you're spending more than you earn. This is common in early-stage businesses but should be temporary.