Free profit calculator
Enter your revenue, cost of goods sold, and operating expenses to see gross profit, net profit, both margins, and markup — updated live, as you type.
On this page14 sections
Estimates only, based on the values you enter. Not financial advice.
Results are estimates. Consult a professional.
What is profit?
Profit is what is left when you subtract cost from revenue. Revenue is the money a sale brings in; cost is what it took to earn that money. The gap between them is profit — the single number that tells you whether a product, a job, or a whole business makes money. This profit calculator returns that figure the moment you enter your revenue and costs, then breaks it into the two layers that matter: gross and net.
One number rarely tells the whole story. A business can show a strong gross profit and still lose money once rent, payroll, and marketing are paid. That is why this tool separates direct cost from operating expense — so gross and net profit appear side by side, not buried in one lumped figure.
Gross profit vs. net profit
Most online profit calculators stop at gross profit — revenue minus the cost of goods sold. That answers one question and hides the more important one. Gross profit shows whether each sale carries its own direct cost; net profit shows whether the business as a whole keeps anything.
Gross profit — the product level
Gross profit is revenue minus cost of goods sold (COGS) — the direct, per-unit cost of making or buying what you sold. It tells you how much each sale contributes before the fixed running costs of the business are paid.
Net profit — the business level
Net profit subtracts operating expenses — rent, salaries, software, marketing, insurance — from gross profit. It is the bottom line: what the owner keeps. A 50% gross profit can become a 5% net profit, or a loss, once overhead is paid.
Profit vs. margin vs. markup
Profit, margin, and markup describe the same gap between revenue and cost — but they measure it three different ways, and mixing them up quietly drains money. Profit is a dollar amount. Margin and markup are both percentages, and they use different bases.
- Profit — a dollar figure: revenue minus cost.
- Margin — profit as a percentage of revenue: profit ÷ revenue × 100.
- Markup — profit as a percentage of cost: profit ÷ cost × 100.
How to calculate profit
Calculating profit is a three-step subtraction. Work from the top of the income statement down — revenue first, then direct cost, then overhead.
- Start with revenue. Total sales for the period, or selling price times units sold.
- Subtract COGS to get gross profit. Take out the direct cost of what you sold. The result is gross profit.
- Subtract operating expenses to get net profit. Take out rent, payroll, and the rest of overhead. What remains is net profit — the bottom line.
The calculator above does all three at once, and adds the percentages: gross margin, net margin, and markup. To set a price from a target percentage instead, use the markup calculator; to track a single blended margin, use the profit margin calculator.
A worked example using the profit calculator
A shop books $10,000 in sales for the month. The goods it sold cost $6,000 to buy and ship in. Rent, software, and part-time help came to $2,500. Here is how the calculator turns those three figures into a full profit picture.
Step 1 — Gross profit and gross margin
Revenue of $10,000 minus COGS of $6,000 gives a gross profit of $4,000. As a share of revenue that is a 40% gross margin. As a markup on the $6,000 cost it is 66.7% — the same dollars, the larger percentage, because markup divides by cost.
| Line | Amount |
|---|---|
| Revenue | $10,000 |
| Cost of goods sold | $6,000 |
| Gross profit | $4,000 |
| Gross margin | 40.0% |
| Markup on cost | 66.7% |
Step 1 result: $4,000 gross profit, a 40% gross margin and a 66.7% markup.
Step 2 — Net profit and net margin
Subtract the $2,500 of operating expenses from the $4,000 gross profit. Net profit is $1,500, which is a 15% net margin. Total cost across both layers is $8,500.
Read the two margins together. A 40% gross margin looked healthy on its own. But overhead cut the take-home to a 15% net margin — strong for a retail business, yet a reminder that gross profit alone overstates how much a business keeps. The next section shows what counts as a good margin by industry.
What is a good profit margin?
There is no universal good profit margin — it swings hard by industry. As a rough rule, a 10% net profit margin is considered average, 20% is high, and 5% is low. But a grocery chain that nets 2% can be thriving while a software firm that nets 15% is underperforming its peers. Compare to your own sector, not a single number.
| Industry | Typical net profit margin | Read |
|---|---|---|
| Grocery & supermarkets | 1–3% | Thin by design; volume carries it |
| Retail (general) | 2–6% | Overhead-sensitive |
| Restaurants | 3–9% | Labor and food cost dominate |
| Manufacturing | 5–12% | Capital and COGS heavy |
| Professional services | 10–20% | Low COGS, people-driven |
| Software / SaaS | 15–30%+ | Near-zero COGS at scale |
Indicative ranges; treat as a starting point, not a verdict. Source: standard managerial-finance benchmarks and CFI guidance.
How to increase profit
Profit moves through four levers. Two lift revenue or its quality; two cut the cost on each layer of the income statement.
- Raise price or change mix. A small price rise drops almost entirely to the bottom line, because the COGS of the unit barely moves.
- Cut COGS. Negotiate supplier terms, reduce waste, or buy in volume — every dollar off COGS lifts gross profit one for one.
- Trim operating expenses. Overhead is the gap between gross and net profit; cutting it widens net margin without touching the product.
- Grow volume on a positive margin. More units help only when each one already earns a gross profit — scaling a loss makes the loss bigger.
Watch the two margins as you pull these levers. A discount that lifts volume but crushes margin can shrink total profit, and adding overhead to chase growth widens the gap between gross and net.
Profit calculator — frequently asked questions
Is profit the same as revenue?
No. Revenue is total sales before any cost is taken out — the top line. Profit is what remains after cost — the bottom line. A business with high revenue can still post zero or negative profit if its costs are higher still.
What is the difference between gross profit and net profit?
Gross profit is revenue minus the direct cost of goods sold. Net profit goes further and subtracts operating expenses too — rent, payroll, marketing. Gross profit measures the product; net profit measures the whole business.
Is margin the same as markup?
No. Margin is profit as a percentage of revenue; markup is profit as a percentage of cost. The same dollar profit gives a smaller margin and a larger markup. A 20% margin equals a 25% markup.
How do I calculate profit margin from profit?
Divide profit by revenue and multiply by 100. A $1,500 net profit on $10,000 of revenue is a 15% net margin. Use gross profit in the numerator for gross margin, net profit for net margin.
Does this profit calculator account for tax?
The net profit here is pre-tax — revenue minus COGS and operating expenses. Income tax and interest are subtracted after this point to reach net income. For planning, treat this figure as operating profit before financing and tax.
Sources and methodology
Formulas follow standard income-statement definitions. Gross profit equals revenue minus cost of goods sold; net profit equals revenue minus all costs. Margin is profit over revenue; markup is gross profit over cost. Benchmark ranges are indicative and drawn from managerial-finance references.
Corporate Finance Institute — Gross Profit.Corporate Finance Institute — Net Profit Margin.Corporate Finance Institute — Markup.Frequently asked questions about the free profit calculator
About this profit calculator
This profit calculator runs entirely in your browser — nothing you type is sent anywhere or stored. Enter revenue, cost of goods sold, and operating expenses, and it computes gross profit, net profit, gross and net margin, and markup the instant you change a number.
It is one of the free tools in our business calculators collection. Browse the full set on the calculators home page.