Profit Margin Calculator

Calculate gross, operating, and net profit margins from your revenue and costs. Also includes a markup-to-margin converter so you never confuse markup with margin again.

Net Profit Margin formula
Net Profit Margin = (Net Income ÷ Revenue) × 100
Profit margin calculator Gross · Operating · Net
$
$
Direct materials, manufacturing, inventory
$
Rent, salaries, marketing, admin
$
Income tax, interest expense
Markup vs. margin converter Never confuse them again
%
⇄
%
Frequently asked questions
What is the difference between gross, operating, and net margin? ›
Gross margin = (Revenue − COGS) ÷ Revenue. It measures production efficiency. Operating margin subtracts operating expenses (salaries, rent, marketing) from gross profit. Net margin subtracts everything including taxes and interest — it shows the true bottom-line profitability of every dollar of revenue.
What is a good profit margin? ›
It varies dramatically by industry. Software companies can achieve 20–30%+ net margins. Grocery stores operate on 1–3% net margins. Restaurants average 3–9%. Professional services (consulting, law) often see 15–25%. Compare your margins to your specific industry benchmarks rather than a universal standard.
What is the difference between markup and margin? ›
Markup is profit expressed as a percentage of COST. Margin is profit expressed as a percentage of SELLING PRICE. A 50% markup on a $10 product = $5 profit = $15 selling price = 33.3% margin. Confusing these two is one of the most common pricing mistakes in small business. Use the converter above to switch between them instantly.
Why does gross margin matter more for some businesses? ›
For manufacturing and product businesses, gross margin is the most critical metric because it determines whether the core business model is viable before overhead costs. SaaS businesses often focus on gross margin because software has near-zero COGS, making operating and net margin more relevant. Service businesses often skip COGS entirely.

About this profit margin calculator

This calculator computes all three levels of profitability — gross, operating, and net profit margin — from your revenue and cost structure. It also includes a markup-to-margin converter and industry benchmark comparison.

Profit margins are the most fundamental measure of business health. Tracking all three levels helps identify whether problems are in production costs (gross margin), overhead (operating margin), or financing and taxes (net margin).