Profit Margin Calculator
Find out what percentage of your revenue is actual profit. Profit margin is one of the fastest ways to check whether a product, service or business is healthy.
Figures are shown in the currency you select. Currency is a display setting only — no exchange-rate conversion is applied.
What your result means
This tool gives you an instant, accurate profit margin calculator so you can make pricing and planning decisions with real numbers instead of guesswork. Adjust any input and recalculate to explore different scenarios before you commit.
Formula
Profit Margin (%) = (Profit ÷ Revenue) × 100
Worked example
A retail shop sells $10,000 worth of goods in a month. The goods themselves, plus all direct costs, total $7,000.
Profit Margin = ($3,000 ÷ $10,000) × 100 = 30%
Common mistakes
- Mixing up profit margin with markup — they use the same numbers but different formulas (see our guide below).
- Calculating margin on selling price when you meant to calculate it on cost, or vice-versa.
- Leaving out indirect costs like packaging, payment processing fees or delivery.
Frequently asked questions
What is a good profit margin?
It varies widely by industry: retail typically sees 20–50% gross margin, restaurants 5–10% net margin, and software/services can exceed 70%. Track your own margin over time rather than chasing a single benchmark.
Is profit margin the same as markup?
No. Margin is profit divided by the selling price (revenue); markup is profit divided by cost. A 50% markup on a $100 cost item ($150 price) only produces a 33.3% margin. Use our Markup Calculator to convert between the two.
Should margin be calculated before or after tax?
This calculator computes margin on the figures you enter. Most businesses track gross or net operating margin before income tax, then handle tax separately as its own line item.