Profit Margin Calculator
Enter what you charged (revenue) and what it cost you to deliver — the calculator shows your gross profit and margin percentage instantly. Used for pricing products, evaluating deals, reporting financials, and checking whether a discounted price still leaves a workable margin. This calculates gross margin only — it doesn't factor in operating expenses, so net margin will always be lower in practice.
When to use this calculator
Use this when evaluating a product or service's profitability — before setting a price, after closing a deal, or when reviewing a product line to see which items carry the best margins. Also useful when you need to report gross margin to investors or in financial statements.
Profit Margin
—
Gross Profit
—
Results are instant — nothing is stored and no account is needed.
Related Calculators
How to Calculate
- Enter the revenue — the price you sold the product or service for.
- Enter the cost — what it cost you to produce or acquire it.
- Gross profit and profit margin percentage appear instantly.
Formula
Subtract cost from revenue to get gross profit. Divide by revenue, then multiply by 100 to express as a percentage.
Examples
Revenue $200, Cost $140
30% margin — $60 profit
Revenue $500, Cost $400
20% margin — $100 profit
Revenue $80, Cost $20
75% margin — $60 profit
Use Cases
- Evaluating the profitability of a product or service
- Setting prices to hit a target gross margin
- Comparing margins across a product range
- Reporting gross profit in financial statements
- Checking whether a discounted price still leaves adequate margin
FAQ
What is the profit margin if revenue is $150 and cost is $100?
The profit margin is 33.33%. Calculation: ($150 − $100) / $150 × 100 = 33.33%.
What is a good profit margin?
It varies by industry. Grocery retail typically runs 2–5%. SaaS companies often target 60–80%. As a rough guide: 10% is average, 20% is healthy, 30%+ is strong for most businesses. Compare against your industry benchmark rather than a universal standard.
What is the difference between gross and net profit margin?
Gross profit margin subtracts only the cost of goods sold (COGS) from revenue. Net profit margin also subtracts operating expenses, taxes, and interest. This calculator computes gross margin — the starting point for profitability analysis.
What is the profit margin if I sell something for $80 that cost $60?
The profit margin is 25%. Calculation: ($80 − $60) / $80 × 100 = 25%.
How is profit margin different from markup?
Margin is profit divided by revenue. Markup is profit divided by cost. A 50% markup equals a 33.33% margin — never the same value (unless margin is 0%). If you're setting prices from cost, the markup calculator is the right starting point.
How does profit margin relate to break-even?
Your gross margin must exceed your operating cost percentage for the business to be profitable. The break-even calculator shows how many units you need to sell to cover fixed costs — which depends on the contribution margin (selling price minus variable cost) at the core.