DIY Cost Tools
Profit Margin Calculator
PRICING & COST CALCULATOR
Calculate gross profit and gross profit margin from revenue and cost of goods sold.
All fields are required. Use matching currency and quantity units. Absolute inputs must not exceed one trillion. Gross margin is not net profit margin. Operating expenses, interest, taxes, returns, and other costs affect final profit. Use revenue and costs from the same period.
How to use this calculator
Replace the example values with figures for the same product, period, or project. Select Calculate and compare the result with your quote, budget, or accounting records. Retain precision until you record the final amount.
Formula and explanation
Gross profit = revenue − cost of goods sold; gross margin = gross profit ÷ revenue × 100
Margin expresses gross profit as a share of revenue. It uses revenue in the denominator, unlike markup.
Worked example
Using Revenue ($) = 10000, Cost of goods sold ($) = 6500, the results are Gross profit ($): 3,500; Gross margin (%): 35.
Important limitations
Gross margin is not net profit margin. Operating expenses, interest, taxes, returns, and other costs affect final profit. Use revenue and costs from the same period.
This tool provides arithmetic estimates for planning, not individualized accounting, tax, financial, or construction advice. Confirm important business and project decisions with appropriate records and professionals.
Frequently asked questions
Can the margin be negative?
Yes. Costs above revenue produce a loss and negative gross margin.
Is margin the same as markup?
No. Margin divides profit by revenue; markup divides it by cost.
Why are more than two decimals shown?
Extra precision helps compare rates and unit prices. Round final currency payments according to applicable billing rules.
What happens with blank inputs?
The calculator clears old results and displays a validation message.
Review notes
Reviewed October 1, 2026. Default results were independently checked against the displayed formulas. Script checks covered blank, negative, nonfinite, and excessive inputs. Calculations run in your browser.