Profit Margin Calculator — Calculate Gross Profit Margin

Revenue ($)Enter a valid revenue greater than 0.

Cost ($)Enter a valid cost.

Profit Margin

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Gross Profit

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How to Use This Tool

Enter your revenue (selling price).
Enter your cost.
Click Calculate for your profit margin percentage and gross profit.

The Profit Margin Formula

Profit Margin = (Revenue − Cost) ÷ Revenue × 100

Profit Margin vs. Markup — A Critical Distinction

Profit margin and markup are often confused but calculate different things: margin expresses profit as a percentage of the selling price (revenue), while markup expresses profit as a percentage of the cost. A 50% markup on a $60 cost item priced at $90 results in only a 33% margin — not 50%. Use our dedicated Markup Calculator if you need that specific calculation.

Why Margin Matters

Profit margin is one of the most widely used metrics for assessing business profitability and efficiency, letting you compare performance across products, time periods, or against industry benchmarks.

Frequently Asked Questions

What is the difference between margin and markup?

Margin is profit as a percentage of the selling price (revenue), while markup is profit as a percentage of the cost — the two numbers are always different for the same transaction (except at 0%), so it's important not to confuse them.

What is a good profit margin?

This varies enormously by industry — grocery stores often operate on margins of just a few percent, while software or luxury goods businesses might see 50%+ margins. Compare against your specific industry's typical benchmarks.

This calculator is provided for general informational and estimation purposes only. Results should not be treated as professional financial, tax, legal, medical, or engineering advice. Always verify critical calculations with a qualified professional or official source before making decisions.