Profit Margin Calculator
Enter revenue and cost to calculate gross profit margin, net margin, and markup. Instant results.
Profit Margin Formula
Profit margin expresses profit as a percentage of revenue. A 40% margin means 40 cents of every dollar in revenue is profit.
Margin vs Markup
Margin uses revenue as the base. Markup uses cost as the base. On the same transaction, they always give different percentages. A 40% margin is always a higher markup — specifically 66.7% markup. See the Markup Calculator.
Gross vs Net Margin
Gross margin only subtracts cost of goods sold (COGS) from revenue. Net margin subtracts all expenses including operating costs, interest, and taxes. This calculator computes gross margin. To compute net margin, enter total costs (including all expenses) in the cost field.
Common Questions
What is a good profit margin?
It varies widely by industry. Software/SaaS: 60–80%+. Retail: 5–20%. Restaurants: 3–9%. Manufacturing: 5–20%. Always compare against your industry benchmark, not a universal standard.
Can profit margin exceed 100%?
No. Margin is profit divided by revenue — profit can never exceed revenue, so margin caps at 100%. Markup, however, has no upper limit.
What markup gives a 50% margin?
A 100% markup. If you double the cost, profit equals cost, which is 50% of revenue. Formula: Markup = Margin ÷ (1 − Margin) × 100.