Business Finance
Profit Margin Calculator
Calculate gross and net profit margins from revenue, cost, and operating expenses, or work backwards from a target margin.
Gross margin
40.00%
Results update when the form is submitted.
Detailed breakdown
- Gross profit
- $4,000.00
- Gross margin
- 40.00%
- Net profit estimate
- $3,000.00
- Net margin
- 30.00%
- Cost percentage
- 60.00%
- Required selling price
- $9,230.77
- Maximum allowable cost
- $6,500.00
How this calculator works
Gross margin compares revenue with direct cost. Net margin also subtracts operating expenses so freelancers and small businesses can see how much profit remains after overhead.
Formula
gross_margin = (revenue - cost) / revenue * 100Example calculation
If revenue is 10,000 and direct cost is 6,000, gross profit is 4,000 and gross margin is 40%.
Important considerations
Margin is sensitive to what you classify as direct cost versus operating expense. Keep the two separate when comparing products or clients.
FAQs
Is gross margin the same as net margin?
No. Gross margin subtracts direct costs only, while net margin also subtracts operating expenses.
Can I calculate a target selling price?
Yes. Choose the selling-price mode and enter cost plus the target margin.
Related tools
Markup Calculator, Break Even Calculator, Project Pricing Calculator
Related guides
Profit Margin vs Markup: What Is the Difference?, How to Price a Product or Service for Profit
Disclaimer
Results are estimates for planning purposes and are not financial, tax, legal, accounting, or investment advice.