Profit Margin Calculator

Work out your gross and net profit margin from revenue, cost of goods sold and operating expenses, compare three periods, and find the selling price you need to reach a target margin.

Basic Profit Margin Calculator

Calculate gross profit margin, net profit margin, and markup percentage.

Multi-Period Margin Analysis

Compare profit margins across multiple time periods.

Period 1 (e.g., Q1)

Period 2 (e.g., Q2)

Period 3 (e.g., Q3)

Target Margin Analysis

Calculate required pricing to achieve target margins.

What this profit margin calculator does

  • Basic: gross profit, net profit, gross margin and net margin from revenue, cost of goods sold (COGS) and operating expenses, with a status label.
  • Intermediate: compares three periods side by side and shows whether margins are improving or declining.
  • Advanced: from your cost per unit, current price, target margin, units and fixed costs, shows the price you need, the price change, projected revenue and profit, and a table of margin scenarios.

The formulas

MeasureFormula
Gross profitrevenue − COGS
Net profitgross profit − operating expenses
Gross margingross profit ÷ revenue × 100
Net marginnet profit ÷ revenue × 100
Price for a target margincost ÷ (1 − target margin ÷ 100)

Worked example: revenue of $100,000, COGS of $60,000 and operating expenses of $25,000 give a gross profit of $40,000 (40% gross margin) and a net profit of $15,000 (15% net margin). For a $40 unit cost and a 50% target margin you would need to sell at $80, which is 33.3% above a $60 price, giving $80,000 of revenue and $35,000 of profit on 1,000 units with $5,000 of fixed costs.

Things to keep in mind

Net profit here is after the operating expenses you enter. Interest and income tax are not modelled separately. The status labels (below 10% poor, 10–20% fair, 20–30% good, 30% or more excellent) are general rules of thumb, and healthy margins vary a lot between industries. These results are estimates for general information only and are not financial, tax or legal advice. Check important figures with a qualified professional.

Frequently asked questions

What is the difference between gross and net margin?
Gross margin only subtracts the direct cost of the goods sold. Net margin also subtracts operating expenses.

Is margin the same as markup?
No. Margin is a percentage of the selling price, markup is a percentage of cost. See our markup calculator for the difference.

Looking for more? See all our free business and professional calculators.

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