Fill in your revenue and COGS on the left — results will appear instantly.
Gross profit is what is left from your sales revenue after you subtract the direct cost of making or buying what you sold. Those direct costs are called Cost of Goods Sold, or COGS.
If your business sells furniture and you bring in $80,000 in sales but paid $48,000 to buy the furniture from suppliers, your gross profit is $32,000. That money has to cover your rent, staff wages, advertising, and everything else before you call what is left net profit.
Gross profit on its own is a number. Gross margin is that number shown as a percentage of revenue. It is the more useful figure when comparing your business to others or tracking performance over time. If you want to go further and see what percentage of each sale you actually keep after all costs, the profit margin calculator covers that in one step.
The core formulas are simple:
Example: Revenue = $100,000 · COGS = $60,000 · Gross Profit = $40,000 · Gross Margin = 40% · Markup = 66.7%.
Once you have your gross profit, subtracting operating expenses and tax gives you net profit — use the net profit calculator to work that out quickly. If you need to estimate or project your top-line sales first, the revenue calculator helps you build that figure before plugging it in here.
| Industry | Typical Gross Margin | Why It Varies |
|---|---|---|
| Software / SaaS | 65% – 80%+ | Low COGS — mainly hosting costs |
| Professional Services | 50% – 70% | Labour-intensive, no physical goods |
| Healthcare / Medical | 30% – 60% | Varies widely by service type |
| Retail — General | 25% – 50% | Depends on category and sourcing |
| E-commerce | 20% – 45% | Shipping and returns eat into margin |
| Manufacturing | 20% – 40% | Raw materials and production costs |
| Construction | 15% – 30% | Labour and materials dominate |
| Restaurant / Food | 10% – 35% | Perishables and portion waste |
| Grocery / Supermarket | 5% – 25% | High volume, thin margins |
Ranges are estimates. Your actual margin depends on pricing power, supplier terms, and operating efficiency.
These two numbers measure the same profit but from different starting points. Confusing them is one of the most common pricing mistakes in business.
How much gross profit you keep at different revenue levels when COGS represents various shares of revenue.
| Revenue ($) | COGS 20%Margin 80% | COGS 40%Margin 60% | COGS 50%Margin 50% | COGS 60%Margin 40% | COGS 70%Margin 30% | COGS 80%Margin 20% |
|---|
Gross Profit = Revenue × (1 − COGS%). Currency shown as $.
Quickly convert between margin and markup — the same profit expressed as a share of price versus a share of cost.
| Gross Margin % | Markup % | COGS % of Revenue | Profit per $100 Revenue | Profit per $100 Cost |
|---|
Markup % = Margin % ÷ (1 − Margin%). For example a 40% margin equals a 66.7% markup — a common source of pricing errors.
How much you can afford to spend on COGS at different revenue levels to reach a specific margin goal.
| Revenue ($) | Target 30% | Target 40% | Target 50% | Target 60% | Target 70% |
|---|
Max COGS = Revenue × (1 − Target Margin). If your current COGS is above this, you need to cut costs or raise prices.
Reference ranges to see how your margin compares to peers in your sector.
| Industry | Low | Average | High | Primary Cost Driver | COGS Includes |
|---|---|---|---|---|---|
| Software / SaaS | 55% | 71% | 85% | Cloud/hosting | Servers, API costs, support |
| Professional Services | 45% | 60% | 75% | Labour | Direct staff time, subcontractors |
| Healthcare | 25% | 48% | 65% | Supplies & labour | Medical supplies, clinical staff |
| Retail — Apparel | 35% | 48% | 60% | Inventory cost | Wholesale price, import duties |
| Retail — Electronics | 10% | 28% | 40% | Product cost | Wholesale, freight |
| E-commerce | 15% | 35% | 55% | Product + shipping | Goods, fulfilment, returns |
| Manufacturing | 15% | 30% | 45% | Raw materials | Materials, direct labour, factory OH |
| Construction | 10% | 22% | 35% | Materials & labour | Subcontractors, materials, equipment |
| Restaurant / Food | 5% | 22% | 40% | Food cost | Ingredients, packaging |
| Grocery | 3% | 15% | 28% | Inventory | Wholesale cost, spoilage |
| Automotive — Sales | 5% | 15% | 22% | Vehicle cost | Dealer invoice price |
| Digital Products | 60% | 75% | 90% | Minimal | Platform fees, delivery bandwidth |
Sources: IBISWorld, NYU Damodaran dataset, industry reports. Ranges are indicative and vary by company size, geography, and competitive environment.
What remains after gross profit covers typical operating expenses at common tax rates.
| Gross Profit ($) | OpEx 30% of GP |
OpEx 50% of GP |
After Tax 15% | After Tax 21% | After Tax 28% |
|---|
Assumes OpEx is a percentage of gross profit. Net profit after tax uses operating profit × (1 − tax rate). Actual figures depend on your specific cost structure and jurisdiction.
What selling price you need at different cost levels to reach your desired gross margin.
| Unit Cost ($) | 20% Margin | 30% Margin | 40% Margin | 50% Margin | 60% Margin | 70% Margin |
|---|
Required Selling Price = Unit Cost ÷ (1 − Desired Margin). Use this to set prices that guarantee your margin target from the start.