Online Free Profit Margin Calculator
Calculate profit margin, gross profit, and markup percentage to optimize pricing and profitability strategies.
Calculation method
Choose how you want to calculate profit margin
Revenue and Costs
Total sales revenue or income generated from your business.
Total cost of goods sold including materials, labor, and direct expenses.
Unit Pricing
The cost to produce or acquire one unit of your product.
The price at which you sell one unit to customers.
Profitability Analysis
Profit Margin Results
Profit Margin
Percentage of revenue as profit
Gross Profit
Total profit amount
Markup Percentage
Profit as percentage of cost
| Revenue | |
| Cost | |
| Gross Profit | |
| Profit Margin % | |
| Markup % | |
Table of Contents
How to Calculate Profit Margin
To find your profit margin for any job, you can either apply a simple formula or use our profit margin calculator to do it for you in seconds. Profit margin shows how much you keep as profit after paying for all your costs, expressed as a percentage of the price you charge.
Before you start, gather these key figures for the job: cost of labour, total cost of materials, overhead costs (such as rent, utilities, tools, or software), and the final price you charged the client.
Enter these values into our profit margin calculator, and it will instantly show your profit, profit margin percentage, and how much you truly earned after expenses. With clear, accurate profit margins, you can price future jobs more confidently, protect your earnings, and spot which services are the most profitable.
Profit Margin Formula
Calculating profit margin is easy when you use a simple formula:
Profit margin (%) = [(Selling price − Total cost) ÷ Selling price] × 100
Here, the selling price is what you charge the customer, and the total cost includes materials, labour, and overhead. The result shows how much profit you keep from every pound or dollar you earn.
If you don’t want to do the math by hand, enter your costs and selling price into our margin calculator. It will instantly show your profit and profit margin percentage, so you can see exactly how much you’re making on each job.
Frequently asked questions
How does a profile margin calculator work?
Profit margin is the difference between what it costs you to produce an item and the price you sell it for, expressed as a percentage. To calculate it, subtract your cost of goods sold (COGS) from the selling price to find your profit. Then divide that profit by the selling price and multiply by 100. The formula looks like this:
Profit margin (%) = [(Selling price − COGS) ÷ Selling price] × 100
This percentage shows how much of each sale is actual profit after covering your direct costs.
What is a Profit Margin?
A profit margin shows how much profit a company keeps from its revenue. In simple terms, it’s the share of money left over after costs are paid, expressed as a percentage of total revenue. Revenue is the total income a business earns from its core activities, mainly from sales of products or services. A higher profit margin means the company is keeping more profit from every pound or dollar it brings in.
What is the purpose of calculating profit margin?
Profit margin is the money left over after you subtract all your business costs from your revenue. It’s shown as a percentage and tells you how profitable your pricing really is. A healthy profit margin shows that you’re charging the right prices, keeping expenses under control, and using materials and labour efficiently to deliver your products or services.
What are the metrics for profit margin?
The three main types of profit margin are gross, operating, and net profit margin. Gross profit margin looks at revenue minus the cost of goods sold (COGS) and shows how much you make after direct production costs. Operating profit margin goes a step further and subtracts both COGS and operating expenses (like rent, salaries, and utilities). Net profit margin is the most complete view, as it subtracts all expenses from revenue, including operating costs, interest, and taxes. Together, these margins help you understand how efficiently your business earns, manages costs, and turns sales into real profit.
What is the formula for calculating profit margin?
The basic formula for calculating profit margin is simple. First, subtract your total cost from your selling price to find your profit. Then divide that profit by the selling price and multiply by 100 to get a percentage.
Profit margin (%) = [(Selling price − Cost) ÷ Selling price] × 100
This percentage shows how much of each sale you keep as profit after covering your costs. A higher profit margin means you’re earning more from every pound or dollar of revenue.