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Profit Margin Calculator
Free profit margin calculator for businesses and freelancers. Enter revenue and costs to calculate gross profit margin, net profit margin, and markup percentage. Works for any business, product, or service.
Enter revenue and costs above to calculate your margins.
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Frequently Asked Questions
What is a good profit margin for a small business?
It depends heavily on the industry. Net margins of 10 to 20% are considered healthy for service businesses and consultancies. Product businesses typically run lower margins of 5 to 15%. Retail margins are often 2 to 8%. Compare yourself to industry benchmarks rather than a single number.
What is the difference between margin and markup?
Margin is calculated as a percentage of the selling price. Markup is calculated as a percentage of the cost. A product that costs £50 and sells for £75 has a 33% margin but a 50% markup. Confusing the two leads to underpricing.
How do I calculate gross profit margin?
Gross profit margin = (Revenue minus Cost of Goods Sold) divided by Revenue, multiplied by 100. For example, if you earn £100,000 and your direct costs are £40,000, gross profit is £60,000 and gross margin is 60%.
What is the difference between gross and net profit margin?
Gross profit margin subtracts only direct costs (materials, direct labour) from revenue. Net profit margin subtracts all costs including overhead, interest, and tax. Net margin is always lower than gross margin for the same business.
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