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How to calculate profit margin (gross and net)

Enter revenue, COGS, and expenses — see gross margin and net margin as percentages instantly.

Margin tells you how much of each dollar of revenue becomes profit. The Profit Margin Calculator separates gross margin (before operating expenses) from net margin (bottom line).

Try it — enter revenue, COGS, and operating expenses

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How it works

  1. Revenue — total sales.
  2. Cost of goods sold (COGS) — direct costs to produce what you sold.
  3. Operating expenses — rent, salaries, marketing, and other overhead.

Gross vs net margin

Gross margin = (Revenue − COGS) / Revenue. It measures product-level profitability.
Net margin = (Revenue − COGS − Expenses) / Revenue. It is the bottom-line percentage.

Benchmarks vary by industry

Software companies often target 70%+ gross margin. Retail may run 25–40% gross and 2–5% net. Compare against your sector, not a universal number.

The How to calculate profit margin (gross and net) is free, runs locally, and never sends your data to a server. More business calculators at maratool.com.