Question 1

How is profit margin calculated?

Accepted Answer

Profit margin % = (Revenue - Cost) / Revenue x 100. For example, $100 revenue and $80 cost gives a $20 profit, which is a 20% profit margin.

Question 2

What's a good profit margin?

Accepted Answer

It varies hugely by industry — retail and grocery often run 2-5% net margins, while software and services can run 60-80%+ gross margins. Compare your margin to others in your specific industry, not a generic benchmark.

Question 3

Is this gross margin or net margin?

Accepted Answer

This calculates gross profit margin — revenue minus your direct cost of goods/services. Net margin would also subtract operating expenses, taxes and interest, which this simple calculator doesn't account for.

Question 4

How is markup % different from margin % here?

Accepted Answer

Markup % is the same profit expressed as a percentage of cost instead of revenue — this calculator shows both so you can see the difference.

Question 5

Is this calculator free to use?

Accepted Answer

Yes, completely free with no sign-up or limits, and it works in any currency.

Profit MarginCalculator