Profit Margin Calculator

Free profit margin calculator for businesses. Calculate gross margin, net margin, and markup from cost and revenue. Three modes: margin from revenue, selling price from margin, and max cost from margin. Includes industry benchmarks and margin vs markup explanation.

Calculate margin from cost and revenue

Revenue / Selling Price ($)

Cost of Goods Sold ($)

Operating Expenses ($)optional

Enter your values above to calculate profit margins in real time.

Margin vs. Markup: What's the Difference?

Profit Margin

Percentage of the selling price that is profit.

Margin = (Price - Cost) / Price x 100

Example: Sell for $100, cost $60 = 40% margin

Markup

Percentage of the cost that is added as profit.

Markup = (Price - Cost) / Cost x 100

Example: Sell for $100, cost $60 = 66.7% markup

Common confusion: A 50% markup does NOT equal a 50% margin. A 50% markup on a $100 cost gives a $150 selling price, which is only a 33.3% margin. Margin is always lower than markup for the same product.

Margin / Markup Conversion

Margin	Markup
10.0%	11.1%
15.0%	17.6%
20.0%	25.0%
25.0%	33.3%
30.0%	42.9%
33.3%	49.9%
40.0%	66.7%
50.0%	100.0%

Typical Profit Margins by Industry

Industry	Gross Margin	Net Margin
Software / SaaS	70–90%	15–35%
Retail (General)	25–50%	2–5%
Retail (Luxury)	55–75%	8–15%
Restaurants	55–65%	3–9%
Manufacturing	25–35%	5–10%
E-Commerce	40–60%	5–15%
Healthcare	50–65%	5–15%
Construction	15–25%	2–8%
Consulting	50–80%	15–25%
Real Estate	30–50%	10–20%

These are approximate ranges. Actual margins vary by company size, region, and business model.

How Profit Margins Are Calculated

Gross Profit Margin

Gross Margin = (Revenue - Cost of Goods Sold) / Revenue x 100

Measures profitability after direct production costs. Does not include operating expenses, taxes, or interest.

Net Profit Margin

Net Margin = (Revenue - COGS - Operating Expenses) / Revenue x 100

The bottom line: what percentage of revenue remains as profit after all expenses.

Markup Percentage

Markup = (Selling Price - Cost) / Cost x 100

How much above cost you charge. Useful for pricing, but not the same as margin.

How to Use Profit Margin Calculator

1Choose calculation mode: margin, selling price, or max cost.
2Enter your known values (cost, revenue, or desired margin).
3View gross margin, net margin, and markup percentages.
4Compare with industry benchmarks.

Frequently Asked Questions

What is the difference between margin and markup?▾

Margin is profit as a percentage of selling price: (Price - Cost) / Price. Markup is profit as a percentage of cost: (Price - Cost) / Cost. A 50% markup gives a 33% margin. A 100% markup gives a 50% margin. They're related but not the same.

What is a good profit margin?▾

It varies by industry. Software/SaaS: 70-90% gross margin. Retail: 25-50%. Restaurants: 3-9% net. Manufacturing: 10-20%. Service businesses: 15-40%. Compare to your specific industry, not across industries.

How do I increase profit margin?▾

Either increase price (if market allows), reduce cost of goods (negotiate with suppliers, improve efficiency), reduce operating expenses, or increase volume to get economies of scale. Most successful businesses focus on all four.

About Profit Margin Calculator

NexTool's Profit Margin Calculator is completely free to use with no sign-up required. Your data is processed directly in your browser and never sent to our servers, ensuring complete privacy and instant results.