Profit Margin Calculator

Profit margin is the percentage of revenue that remains as profit after accounting for costs. There are three main types: gross margin (revenue minus cost of goods sold), operating margin (after operating expenses), and net margin (after all expenses including taxes).

Profit margin is calculated by dividing profit by revenue, then multiplying by 100. For example, if you make $30 profit on a $100 sale, your profit margin is (30/100) × 100 = 30%.

A 'good' profit margin varies by industry. Retail typically sees 2-5%, software companies may see 20-40%, and service businesses often range from 15-25%. Compare your margins to industry benchmarks for the most accurate assessment.

Margin is the percentage of the selling price that is profit, while markup is the percentage added to the cost to get the selling price. For example, a $10 cost sold at $15 has a 33% margin but a 50% markup.