Calculate your profit margin
Enter your revenue and cost to see your gross profit, margin and markup in one go.
- Gross profit
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- Margin
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- Markup
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Gross profit: —, Margin: —, Markup: —
What is profit margin?
Profit margin is the proportion of revenue left over as profit once costs are deducted. It's expressed as a percentage, so a 60% margin means 60p of every £1 in revenue is profit. Margin is one of the clearest ways to see how efficiently a business turns sales into profit.
Gross margin vs net margin
Gross margin looks only at the direct cost of goods or services sold, ignoring overheads such as rent, salaries, and marketing. Net margin deducts all costs, including overheads, tax, and interest, to show what's actually left over. This calculator works out gross margin — a quick, simple gauge of pricing health before overheads are accounted for.
How to calculate profit margin
Subtract the cost from the revenue to get the gross profit, then divide the gross profit by the revenue and multiply by 100. For example, revenue of £250 and cost of £100 gives a gross profit of £150, and a margin of (150 ÷ 250) × 100 = 60%.
Margin vs markup
Margin and markup both measure profit, but against different bases. Margin is profit as a percentage of revenue; markup is profit as a percentage of cost. The same £250 revenue and £100 cost gives a 60% margin but a 150% markup, because the £150 profit is being compared to a much smaller cost figure. Mixing the two up is a common pricing mistake, so it's worth checking which one you're being quoted.
People also ask
- It varies significantly by industry. Retail and food businesses often work on margins of 5–20%, while software and services businesses can see 60–90%. Compare against others in your sector rather than a single benchmark figure.
- Raise prices, reduce the cost of goods or services sold, or a combination of both. Even a small reduction in costs or increase in price can meaningfully improve margin, since it flows straight through to profit.
- They describe the same profit from two angles, so neither is inherently "better" — but margin is usually more useful for judging profitability, since it's expressed as a share of revenue rather than of cost.
- Yes. If the cost of a sale exceeds the revenue it generates, the gross profit is negative, and so is the margin. This calculator will show a negative margin in that case rather than hiding it.
