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Profit Margin

Profit Margin Calculator

Calculate your gross and net profit margin, plus markup percentage, from cost price and revenue — and see how you compare to industry benchmarks.

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💰 Enter Cost & Revenue

Gross Margin = (Revenue − COGS) / Revenue × 100
Net Margin = (Revenue − COGS − Opex) / Revenue × 100
Markup = (Revenue − Cost) / Cost × 100

📊 Your Margins

Enter values to see margins
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Disclaimer: Results provided by this calculator are for educational and estimation purposes only and do not constitute formal financial, tax, or legal advice. Actual rates, deductions, and statutory requirements vary by jurisdiction and business circumstances. Consult a chartered accountant or company secretary before making business financial decisions.

Gross Margin, Net Margin, and Markup — Not the Same Thing

Gross Margin = (Revenue − COGS) ÷ Revenue × 100 — measures profitability before operating expenses. Net Margin subtracts operating expenses too, giving your true bottom-line profitability. Markup is a different calculation entirely: Profit ÷ Cost × 100 (not ÷ Revenue) — a common source of confusion since a 40% margin corresponds to a 66.7% markup, not 40%.

Worked Example

A product costs ₹60,000 to produce and sells for ₹1,00,000: Gross Profit = ₹40,000, Gross Margin = 40.0%, but Markup = 40,000 ÷ 60,000 = 66.7% — the same ₹40,000 profit expressed two different, easily confused ways. Industry benchmarks vary widely: retail typically runs 20-30% margin, services 30-50%, and SaaS businesses often 60-80%.

Frequently Asked Questions

Margin is calculated as a percentage of the selling price (revenue), while markup is calculated as a percentage of the cost. Since revenue is always higher than cost when you're profitable, markup percentage is always higher than margin percentage for the same underlying profit — mixing them up when setting prices is a common and costly business mistake. See our dedicated Margin vs Markup Calculator for a side-by-side conversion tool.
It varies enormously by industry: retail and grocery often run thin margins (20-30% gross, much less net), professional services commonly see 30-50%, and software/SaaS businesses can exceed 70-80% gross margin due to low marginal cost of delivery. Compare your margin against direct competitors in your specific industry rather than a generic benchmark.
Either works as long as you're consistent and clear about which one you're using — the risk is applying a markup percentage while believing you're setting a margin percentage (or vice versa), which silently under-prices your product. Many businesses standardize on margin-based pricing since it directly ties to the percentage of revenue that becomes profit.
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