Free Profit Margin Calculator
Calculate your profit margins
Gross margin, net margin, and markup — all in one place. Free, no account needed.
Margin Results
Margin vs Markup — What's the Difference?
Profit Margin: Percentage of sale price that is profit.
Margin = ((Revenue - Cost) / Revenue) × 100
Markup: Percentage added to cost to determine price.
Markup = ((Price - Cost) / Cost) × 100
Industry Margins
- Software/SaaS: 70-90%
- Professional services: 50-70%
- Luxury retail: 60-80%
- Restaurants: 3-5%
- Grocery stores: 1-3%
- Consulting: 10-30%
Example: Freelance Consultant
A consultant charges $50/hour with costs of $15/hour (office, insurance, tools).
Gross Margin = (($50 - $15) / $50) × 100 = 70%
Markup = (($50 - $15) / $15) × 100 = 233%
Profit per Hour = $50 - $15 = $35
How to Improve Your Profit Margin
Negotiate better supplier prices, optimize processes, eliminate unnecessary expenses.
Improve value perception, segment customers, offer premium packages.
Promote high-margin products/services, discontinue low-margin lines.
Automate processes, reduce delivery time, minimize waste.
Ready to optimize your profitability?
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Calculate your gross margin, net margin, and markup instantly — free, no signup needed. Understanding your margins is the difference between a business that grows and one that slowly bleeds cash. Our profit margin calculator takes your revenue and costs and breaks down exactly how much you keep on every dollar of sales. Whether you're pricing a new product, evaluating a service offering, or comparing margins across business lines, this tool shows you the numbers that matter. It handles gross margin (revenue minus cost of goods sold), net margin (after all expenses), and markup percentage — the three figures every business owner needs at their fingertips. Works for ecommerce, restaurants, agencies, freelancers, and any business that sells something.
How to Calculate Profit Margin
- 1
Enter your revenue
Input your total sales revenue for the period or product you want to analyze.
- 2
Enter your cost of goods sold
Add the direct costs of producing or delivering your product or service — materials, labor, shipping.
- 3
Add operating expenses
Include overhead like rent, marketing, software, and salaries to calculate net margin.
- 4
Review your margins
See your gross margin, net margin, and markup percentage calculated side by side with clear explanations.
Why Use This Profit Margin Calculator?
Three calculations in one
Get gross margin, net margin, and markup calculated together so you can see the full picture of your profitability.
Instant pricing insight
Know exactly how much profit you make on each sale — then adjust pricing or costs to hit your target margin.
No account needed
Runs entirely in your browser. No signup, no spreadsheet formulas to debug, no finance degree required.
Compare scenarios
Quickly test different price points and cost structures to find the sweet spot for your business.
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a percentage of revenue (selling price). Markup is profit as a percentage of cost. A product that costs $60 and sells for $100 has a 40% margin but a 66.7% markup. They describe the same profit differently.
What is a good profit margin for a small business?
It depends on your industry. Retail averages 2-5% net margin, professional services 15-25%, and software/SaaS can hit 20-40%. More important than benchmarks is whether your margin covers your living expenses and lets you reinvest.
How do I calculate gross margin?
Gross margin = (Revenue - Cost of Goods Sold) / Revenue × 100. For example, if you sell a product for $100 and it costs you $35 to make, your gross margin is 65%.
How do I improve my profit margin?
You can raise prices, reduce cost of goods sold (negotiate with suppliers, find cheaper materials), cut operating expenses, or increase volume to spread fixed costs. Most businesses benefit from tackling all four.
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