Profit Margin Calculator
Use this free profit margin calculator and margin calculator to quickly calculate gross profit, net profit, gross margin, and net profit margin based on your revenue and business costs.
How to Calculate Profit Margin
Profit margin shows how much of your revenue remains as profit after costs.
Net Profit = Revenue − Total Costs
Net Profit Margin = (Net Profit ÷ Revenue) × 100
For example, if your business generates $10,000 in revenue and has $7,000 in total costs, your net profit is $3,000 and your net profit margin is 30%.
Gross Margin vs. Net Profit Margin
Gross margin measures profit after the direct cost of producing or purchasing what you sell. Net profit margin also accounts for other business expenses, giving you a broader view of overall profitability. This calculator shows both so you can compare them easily.
Profit Margin vs. Markup
Profit margin measures profit as a percentage of your selling price, while markup measures how much you increase a product’s cost to determine its selling price.
If you’re setting product prices, use our markup calculator.
Frequently Asked Questions
How do you calculate profit margin?
Subtract total costs from revenue to calculate profit. Then divide profit by revenue and multiply by 100 to calculate profit margin.
What does a 30% profit margin mean?
A 30% profit margin means the business keeps $30 in profit for every $100 of revenue after the costs included in the calculation.
What is the difference between margin and markup?
Margin measures profit as a percentage of selling price or revenue. Markup measures how much a cost is increased to determine the selling price.
How do I calculate profit margin for an ecommerce store?
To calculate ecommerce profit margin, subtract product costs and other business expenses, such as advertising, payment processing fees, shipping, software, and fulfillment costs, from your revenue. Divide the resulting profit by revenue and multiply by 100. This calculator can be used for Shopify stores, dropshipping businesses, and other ecommerce businesses.