Profit Margin Calculator
Use this profit margin calculator to measure gross profit, operating profit, net profit, markup, cost ratio, expense ratio, and target selling price in one practical workspace.
Profit Margin Calculator helps business owners, freelancers, accountants, and students understand how much profit remains after product costs, operating expenses, and other costs. It can also reverse-calculate the selling price needed to achieve a target margin or markup.
Margin Structure
| Metric | Value | Meaning |
|---|---|---|
| No calculation yet. | ||
Key Formulas
| Formula | Calculation |
|---|---|
| Gross Profit | Revenue − Cost of Goods Sold |
| Gross Margin % | Gross Profit ÷ Revenue × 100 |
| Net Profit | Revenue − Direct Costs − Operating Expenses − Other Costs |
| Net Margin % | Net Profit ÷ Revenue × 100 |
| Markup % | Gross Profit ÷ Direct Costs × 100 |
| Price from Target Margin | Unit Cost ÷ (1 − Target Margin) |
| Price from Target Markup | Unit Cost × (1 + Target Markup) |
How to use it
Enter revenue, direct costs, operating expenses, and other costs. The calculator updates automatically to show gross margin, net margin, markup, and cost structure.
When to use it
Use it when pricing products, reviewing monthly results, comparing projects, or checking whether expenses are reducing profitability.
Practical example
If revenue is $50,000 and direct costs are $30,000, gross profit is $20,000 and gross margin is 40% before other expenses.
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Profit Margin Calculator FAQ
What is profit margin?
Profit margin is the percentage of revenue that remains as profit after deducting costs. Gross margin focuses on direct costs, while net margin includes operating and other costs.
What is the difference between margin and markup?
Margin is profit divided by selling price. Markup is profit divided by cost. A 40% margin is not the same as a 40% markup.
Can I use this calculator for services and freelancers?
Yes. For services, use direct delivery cost or billable labor cost as direct cost, then add business expenses such as software, marketing, rent, and administration.
Does this calculator include tax rules?
No. It lets you enter tax or finance costs manually as other costs. Tax treatment differs by country, so use this as a planning estimate only.
Why is target margin price higher than markup price?
Because target margin is calculated as profit divided by selling price, while markup is calculated as profit divided by cost.