Profit Margin Calculator

Calculate gross, operating, and net profit margin.
Find selling price from target margin. Includes industry benchmarks.

Gross · Operating · Net margin · Markup converter · Benchmarks
Profit Margin Calculator
Full P&L Margin
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Rent, salaries, marketing, admin — not in COGS
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Interest expense + income tax provision
Markup ↔ Margin Conversion Table

Markup is calculated on cost; margin is calculated on selling price. Use this table to convert between the two.

Markup %→ Margin %Margin %→ Markup %
10%9.09%10%11.11%
20%16.67%20%25.00%
25%20.00%25%33.33%
33%24.81%30%42.86%
50%33.33%33%49.25%
75%42.86%40%66.67%
100%50.00%50%100.00%
200%66.67%60%150.00%
Industry Profit Margin Benchmarks

Gross and net margin ranges by industry. Net margins vary widely based on leverage, taxes, and business model.

Software / SaaS
Gross Margin70–90%
Net Margin15–30%
E-Commerce / Retail
Gross Margin25–45%
Net Margin2–6%
Restaurants
Gross Margin60–70%
Net Margin3–9%
Manufacturing
Gross Margin20–40%
Net Margin5–15%
Professional Services
Gross Margin50–75%
Net Margin10–25%
Construction
Gross Margin15–25%
Net Margin2–8%
Healthcare / Medical
Gross Margin40–60%
Net Margin5–20%
Wholesale / Distribution
Gross Margin15–30%
Net Margin1–5%
Real Estate / Brokerage
Gross Margin50–80%
Net Margin15–30%

The Three Profit Margins Every Business Needs to Track

Gross margin, operating margin, and net margin each tell a different part of your business story. A company can have a high gross margin but terrible net margin if operating costs are out of control.

Gross Profit Margin

Gross Margin = (Revenue − COGS) ÷ Revenue. This shows how efficiently you produce or source your product. A falling gross margin means your direct costs are rising faster than your prices.

Operating Profit Margin

Operating Margin = (Revenue − COGS − OpEx) ÷ Revenue. Also called EBIT margin. This measures operational efficiency — how well you run the business before financing costs and taxes.

Net Profit Margin

Net Margin = Net Income ÷ Revenue. The bottom line. A 10% net margin means for every $100 in revenue, you keep $10 as profit after all costs, interest, and taxes.

Related: Markup Calculator · Break-Even Calculator · COGS Calculator

FAQ

Profit margin questions answered

What is profit margin?
Profit margin = Profit ÷ Revenue × 100. It tells you what percentage of revenue you keep after costs. Gross margin only subtracts COGS. Net margin subtracts all costs including operating expenses, interest, and taxes.
What is a good profit margin?
Depends on industry. Software typically achieves 70–90% gross and 15–30% net. Retail: 25–45% gross, 2–6% net. Restaurants: 3–9% net. A 10%+ net margin is generally considered good. Compare against your industry benchmark, not an absolute number.
How do I calculate selling price from target margin?
Selling Price = Cost ÷ (1 − Margin%). If cost is $70 and you want 30% margin: $70 ÷ 0.70 = $100. This is different from markup: a 30% margin requires a 42.86% markup (cost × 1.4286 = selling price).
What is the difference between margin and markup?
Margin is calculated on selling price (profit ÷ price). Markup is calculated on cost (profit ÷ cost). A 50% markup = 33.3% margin. A 50% margin = 100% markup. They measure the same profit in different ways — always specify which you mean to avoid costly pricing errors.