Profit Margin Calculator

Find gross profit and profit margin percentage.

How profit margin works

Profit margin is the percentage of revenue that remains as profit after covering costs — a core measure of pricing and cost efficiency.

Enter revenue and cost for the period or product. The calculator returns the gross profit amount and the margin percentage.

Profit margin is expressed relative to revenue (the selling price). If you want to compare profit relative to cost instead, see the Markup vs Margin Calculator, which shows both side by side.

The formula

Profit margin = (Revenue − Cost) ÷ Revenue × 100

Subtract cost from revenue to get gross profit, then divide by revenue and multiply by 100.

Worked example

$1,000 revenue, $600 cost

($1,000 − $600) ÷ $1,000 × 100 = 40% profit margin.

Frequently asked questions

Is this gross margin or net margin?

This is a gross margin calculation (revenue minus the cost you enter). For net margin, include all operating expenses, taxes and interest in your cost figure.

Can margin be negative?

Yes — when cost exceeds revenue, margin is negative, meaning the product or period operated at a loss. The calculator does not clamp this away.

What's a good profit margin?

It varies enormously by industry — compare against your own historical margin and industry benchmarks rather than a single universal target.

Next steps in your analysis

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