What is profit margin?

Profit margin is the percentage of revenue that remains as profit after subtracting costs. Gross margin subtracts only COGS. Net margin subtracts all expenses including operating costs and taxes.

What is the difference between profit margin and markup?

Profit margin is calculated as a percentage of the selling price. Markup is calculated as a percentage of the cost. For example, a product costing $50 sold for $100 has a 50% margin but a 100% markup.

What is a good profit margin?

It depends heavily on industry. SaaS businesses target 70–85% gross margins. eCommerce typically targets 20–50%. Restaurants operate at 60–70% gross but thin net margins of 3–9%.

How do I calculate gross profit margin?

Gross Profit Margin = ((Revenue − COGS) ÷ Revenue) × 100. For example, selling a product for $100 that costs $60 to produce gives a gross margin of 40%.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a measure of core operational profitability. It is widely used to compare businesses and assess acquisition value.

How do I price a product to hit my target margin?

Use the "Target margin" mode above. Enter your cost and target margin percentage, and the calculator shows exactly what selling price you need to achieve that margin.

Free Profit Margin Calculator Online

Calculate gross and net profit margin, markup, and a full P&L waterfall. Price products to a target margin and compare your result against industry benchmarks.

Currency

Selling price

Cost of goods (COGS)

Gross profit margin

—

Gross profit: —
Markup %: —
Revenue multiple: —
—: —

Typical gross margins by industry

Industry	Typical gross margin
SaaS	70–85%
eCommerce retail	20–50%
Restaurants	60–70%
Manufacturing	25–35%
Consulting	50–70%
Grocery retail	20–30%

Your result is colour-coded against these ranges in the calculator above.

Frequently Asked Questions

What is profit margin?: Profit margin is the percentage of revenue that remains as profit after subtracting costs. Gross margin subtracts only COGS. Net margin subtracts all expenses including operating costs and taxes.
What is the difference between profit margin and markup?: Profit margin is calculated as a percentage of the selling price. Markup is calculated as a percentage of the cost. For example, a product costing $50 sold for $100 has a 50% margin but a 100% markup.
What is a good profit margin?: It depends heavily on industry. SaaS businesses target 70–85% gross margins. eCommerce typically targets 20–50%. Restaurants operate at 60–70% gross but thin net margins of 3–9%.
How do I calculate gross profit margin?: Gross Profit Margin = ((Revenue − COGS) ÷ Revenue) × 100. For example, selling a product for $100 that costs $60 to produce gives a gross margin of 40%.
What is EBITDA?: EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a measure of core operational profitability. It is widely used to compare businesses and assess acquisition value.
How do I price a product to hit my target margin?: Use the "Target margin" mode above. Enter your cost and target margin percentage, and the calculator shows exactly what selling price you need to achieve that margin.