Profit Margin Calculator
Calculate gross margin, markup, and target revenue in three flexible calculation modes.
Read the Guide
Calculate gross margin, markup, and target revenue in three flexible calculation modes.
Read the GuideTotal sales income before any deductions.
Direct costs to produce your goods or services.
Rent, salaries, marketing, overhead — excludes COGS.
Gross profit margin measures the percentage of revenue remaining after subtracting the Cost of Goods Sold (COGS). Net profit margin goes further by also deducting operating expenses such as rent, salaries, and marketing. Markup is a related metric that expresses profit as a percentage of cost rather than revenue.
Gross Profit = Revenue − COGS | Gross Margin % = Gross Profit / Revenue × 100 | Net Profit = Gross Profit − Operating Expenses | Net Margin % = Net Profit / Revenue × 100 | Markup % = (Revenue − COGS) / COGS × 100A software company with $500,000 revenue and $50,000 in server/support costs (COGS) has a 90% gross margin. After $300,000 in R&D and sales expenses (operating), the net margin is 30%. High gross margins give SaaS companies flexibility to invest in growth.
A grocery store with $1M revenue, $750K COGS, and $200K operating expenses earns a 25% gross margin and just 5% net margin. Small changes in COGS pricing (supplier negotiations) or operating efficiency have outsized impact on profitability.
Gross profit = revenue − COGS. Gross margin % = grossProfit / revenue × 100. Net profit = grossProfit − operatingExpenses. Net margin % = netProfit / revenue × 100. Markup = (revenue − COGS) / COGS × 100 (undefined when COGS = 0).