Gross Profit Margin Calculator

Enter your revenue and your cost of sales to see your gross profit, your gross profit margin as a percentage, and your markup on cost.

What the numbers mean

Gross profit is revenue minus the direct cost of what you sold. It is what is left to cover fixed costs.
Gross profit margin expresses that as a percentage of revenue. It is the figure to track over time.
Markup expresses the same profit as a percentage of cost instead. Markup is always the larger number, which is why the two get confused in pricing conversations.

What counts as cost of sales

Direct costs only: materials, goods bought for resale, direct labour, delivery of goods to customers. Rent, salaries of office staff, utilities and marketing are fixed costs and belong in the profit and break-even calculator instead.

Frequently asked questions

Is margin the same as markup?

No, and mixing them up is a common cause of underpricing. Margin is profit as a share of the selling price. Markup is profit as a share of cost. A 50% markup is only a 33.3% margin.

What is a good gross profit margin?

It depends entirely on the sector. A distributor working on volume may run a single-digit margin, while a service business can run far higher. The useful comparison is your own margin over time, and against businesses doing the same thing.