Enter your revenue and total costs to instantly calculate profit margin, markup, and net profit amount.
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Profit Margin Calculator
Enter your revenue and total costs to instantly calculate profit margin, markup, and net profit amount.
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Results
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Net Profit
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Profit Margin
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% of revenue
Revenue
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total sales
Markup
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% of cost
Costs
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total expenses
Margin Quality—
Formula Used
Profit Margin = (Revenue − Costs) ÷ Revenue × 100
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What Is Profit Margin?
Profit margin is the percentage of revenue that exceeds total costs — it's the fundamental measure of business profitability. It tells investors, owners, and managers how many cents of profit are generated from each dollar of revenue after all costs are accounted for.
This calculator uses a simplified profit margin model: Revenue minus Total Costs. For a full breakdown of gross, operating, and net margins with individual cost categories, use our Net Margin Calculator. This version is ideal for quick profitability checks.
📊 Real Business Example
A landscaping company generates $180,000 in annual revenue. Total costs (labor, equipment, fuel, insurance, overhead): $126,000.
A 30% margin is excellent for a service business. The owner keeps $30 from every $100 billed.
How to Use This Calculator
Enter your total revenue for the period you want to analyze.
Enter your total costs — include everything: COGS, overhead, salaries, rent, utilities.
The calculator shows profit margin %, markup %, and raw profit amount simultaneously.
Use the quality bar to benchmark your margin against general business standards.
Frequently Asked Questions
Profit margin is the percentage of revenue that exceeds total costs. Formula: (Revenue − Total Costs) / Revenue × 100. A 25% profit margin means for every $100 of sales, $25 is profit. It's the primary measure of business profitability.
For small businesses, a net profit margin of 7-10% is considered average. 10-20% is good. Above 20% is excellent. Service businesses often achieve higher margins than product businesses because they have lower COGS. Industry matters enormously.
Revenue is the total money coming in from sales. Profit margin is what percentage of that revenue remains as profit after paying all expenses. High revenue with thin margins is less valuable than moderate revenue with strong margins.
No. Profit margin is capped at 100% (if costs are zero, which is impossible). If your calculation shows over 100%, double-check that you're entering total costs correctly and not mixing up profit with revenue.
Two directions: increase revenue (raise prices, increase volume) or decrease costs (COGS, overhead, waste). Often, raising prices is the fastest path — a 5% price increase on the same volume directly becomes profit. Audit your costs quarterly for waste.
Gross profit margin only subtracts COGS. Net profit margin subtracts everything. This calculator shows a simplified profit margin (Revenue minus all costs). For the multi-layered breakdown, use our Gross Margin and Net Margin calculators.
Use the unit economics version: (Selling Price − Unit Cost) / Selling Price × 100. For a product selling at $50 that costs $28 to make and ship, the margin is ($50-$28)/$50 × 100 = 44%. Our main Margin Calculator on the homepage is perfect for this.
It varies by stage and industry. Public market investors often look for 10%+ net margins. Venture-backed SaaS companies focus on growth even at negative margins. Private equity targets businesses with 15%+ EBITDA margins. The key is whether your margin is improving year-over-year.