Calculate gross, net and operating profit margins instantly. Works in any currency. Free, no signup needed.
$
$
GROSS PROFIT MARGIN
—
% of revenue
GROSS PROFIT
—
revenue − COGS
MARKUP
—
% above cost
MARGIN HEALTH
Revenue—
Cost of Goods Sold—
Gross Profit—
$
$
$
$
NET PROFIT MARGIN
—
% of revenue
NET PROFIT
—
after all expenses
GROSS MARGIN
—
before expenses
OPERATING MARGIN
—
before taxes
Revenue—
− Cost of Goods Sold—
= Gross Profit—
− Operating Expenses—
= Operating Profit (EBIT)—
− Taxes—
= Net Profit—
$
%
SELLING PRICE
—
cost + markup
PROFIT MARGIN
—
% of selling price
PROFIT AMOUNT
—
per unit
What is Profit Margin?
Profit margin is a key financial metric that measures how much profit a business makes for every unit of revenue. It tells you what percentage of your sales actually becomes profit after covering costs.
Gross Profit Margin
Gross profit margin measures profitability after deducting the direct costs of producing your goods or services (COGS).
Net profit margin is the bottom line — profit remaining after ALL expenses including operating costs, interest, and taxes.
Net Profit Margin = (Net Profit ÷ Revenue) × 100
What is a Good Profit Margin?
• Under 5% — Thin margins, vulnerable to cost increases • 5%–20% — Healthy for most industries • 20%+ — Excellent, common in software and services
Frequently Asked Questions
What's the difference between margin and markup?
Margin is a percentage of the selling price. Markup is a percentage of the cost. A 40% markup gives only a 28.6% margin — they are not the same number.
Does currency affect profit margin calculation?
No — profit margin is a percentage, so it works identically in USD, GBP, EUR, PKR, INR or any currency. Just make sure revenue and costs are in the same currency.
How do I improve my profit margin?
Increase prices, reduce COGS through better supplier negotiation, cut operating expenses, or shift focus to higher-margin products and services.