PRICING, SALES, AND PAY SCENARIOS

Profit Margin Calculator

Calculate gross profit margin from revenue and the direct cost you enter.

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Change any assumption, then calculate your estimate.

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Enter your values and select Calculate. Your result stays on this device.

How it works

Gross profit margin = (revenue − direct cost) ÷ revenue × 100.

Assumptions

Uses only the two amounts you enter. It does not classify expenses, include taxes, or create a financial statement.

About this calculator

Use this profit margin calculator to turn a revenue and direct-cost scenario into gross profit and gross margin. It is useful for a fast pricing check, but it does not decide which expenses belong in your accounting records.

How to use it

  1. Enter revenue or the selling price for the scenario.
  2. Enter the direct cost you want to compare with that revenue.
  3. Read gross profit and the percentage margin together.
  4. Use your accounting method and current records before making a pricing, tax, or reporting decision.

Use case

profit margin calculator: a clear planning check

Calculate gross profit margin from revenue and the direct cost you enter. The stated formula, assumptions, and result limits remain visible so the calculation can be checked in context.

Use a clear profit margin calculator scenario with values you can verify before relying on the result.

Method and update

Last reviewed: 2026-08-10. This tool performs the stated formula locally in your browser using the values you enter.

Frequently asked questions

How do you calculate profit margin?

Subtract direct cost from revenue, then divide that gross profit by revenue and multiply by 100.

What is the difference between margin and markup?

Margin is measured against revenue, while markup is measured against cost. The percentages are not interchangeable.

Does this profit margin calculator include overhead?

No. Include only the cost figure you choose. Payroll, rent, taxes, shipping, and overhead require your own accounting treatment.

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