Profit margin calculator

Work out gross profit, gross margin, net margin and markup from your revenue and costs.

What you enter

• Revenue (ex GST) – Total sales for the period, excluding GST.
• Cost of goods sold – Direct costs of what you sold: stock, materials, direct labour, subcontractors.
• Operating expenses – Overheads for the same period: rent, wages not in cost of goods sold, marketing, software, insurance.

How it is calculated

Gross profit = Revenue − Cost of goods sold. Gross margin = Gross profit ÷ Revenue × 100. Net profit = Gross profit − Operating expenses. Net margin = Net profit ÷ Revenue × 100. Markup = Gross profit ÷ Cost of goods sold × 100.

Assumptions

• All figures cover the same period (a month, quarter or year).
• Amounts exclude GST.
• Net profit here is before income tax, interest and depreciation adjustments your accountant may make.

Limitations

• Margins vary widely by industry; compare yourself with your own history and similar businesses, not a generic target.
• A single margin hides product-level detail. Run it per product or service line to find what really makes money.

Related articles

• Pricing and profit margins – The difference between markup and margin, three ways to set prices, how break-even works, and why a small price increase does more for profit than a large increase in sales.
• Profit and loss statements – How to read a profit and loss statement line by line, what gross margin and net margin are telling you, and how to use the P&L each month to find where the business is leaking money.
• Understanding profitability – Revenue is not profit. The difference between gross, operating and net profit, how margins and break-even work, why profitable businesses still run out of cash, and the levers that lift profit.