Profit margin calculator
Enter revenue and cost. See your gross margin, profit, and markup — instantly.
What this tool does
Margin is the most misused number in small business. Founders mix it up with markup, confuse gross with net, and quote it from memory in pitch meetings. The fix is to stop guessing — run the actual math, watch the numbers move when you raise the price by 10%, and never again wonder whether the business is healthy.
How to use it
- Enter total revenue — the amount the customer pays before any refunds or discounts.
- Enter cost of goods sold — only the costs that scale with the sale (materials, processor fees, the fractional cost of a contractor for that specific job). Don't include rent or your salary here.
- Read three numbers: gross profit (dollars left over), gross margin (percentage of revenue you keep), and markup (how much you marked the cost up to get to your price).
Why it matters
Healthy gross margins are what let a small business survive a bad month, pay a fair wage, and reinvest in growth. If your margin is under 30% and you sell your time, you almost certainly need to raise your prices — most solo professionals can lift prices 20-40% without losing a single client they actually want to keep.
Questions people actually ask.
What's the difference between margin and markup?
Margin is the percentage of the selling price you keep as profit. Markup is the percentage you added on top of cost to reach the selling price. A 50% markup is only a 33% margin. People who pitch you on margin and deliver markup are not your friends.
Is this gross or net margin?
Gross. This calculator looks only at revenue minus the variable costs of the sale itself. Net margin subtracts every fixed cost in the business — rent, payroll, software, your salary — and is best calculated from your P&L, not a single-sale tool.
What's a good gross margin?
Depends on the business. Services usually want 60%+. Physical products with inventory often live around 40-50%. SaaS regularly clears 80%. The honest answer: 'good' is high enough that you can pay yourself and still reinvest. If you can't, it's not high enough.