Finance and profitability
Profit margin calculator
Find your gross profit, gross margin and markup per unit, and net margin after overheads.
Enter a selling price and what it costs you to deliver. You get gross profit, gross margin and markup, plus net margin if you add overheads, so you can price with confidence.
You will need
- Your selling price (ex GST)
- The direct cost per unit
- Optional: overheads per unit
What you enter
- Selling price per unit (ex GST) – What you charge for one product, job or hour, excluding GST.
- Direct cost per unit – Costs that come with each sale: stock, materials, direct labour, subcontractors, freight, merchant fees.
- Overheads per unit (optional) – Your share of rent, admin wages, software and marketing for each unit. Add it to see net margin as well as gross.
How it is calculated
Gross profit = Selling price − Direct cost. Gross margin = Gross profit ÷ Selling price × 100. Markup = Gross profit ÷ Direct cost × 100. With overheads: Net profit = Gross profit − Overheads per unit, Net margin = Net profit ÷ Selling price × 100.
Assumptions
- All amounts are per unit and exclude GST.
- Gross margin uses direct costs only. Net margin also subtracts the overheads you enter, before income tax.
Limitations
- Margin and markup are different numbers: a 50% markup is only a 33% margin. Price from margin, not markup.
- Overheads per unit depend on volume: if you sell fewer units, each one carries more overhead.