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Profit Margin Calculator | Free Business Profit Tool 2026

Calculate your profit margin with costs, revenue, and markup percentages

$

Your total sales or revenue

$

All your business expenses (COGS, overhead, fees)

Net Profit

Revenue minus all costs

$0.00

Profit Margin

Low margin (% of revenue kept as profit)

0.0%

Markup

How much you added to your costs

0.0%

How to Use This Profit Margin Calculator

This free profit margin calculator helps small businesses, freelancers, and side hustlers understand their true profitability. Enter your revenue and costs to instantly see your profit margin percentage.

  1. Enter your revenue: Total sales for a product, project, or period.
  2. Enter your costs: All expenses including materials, fees, and overhead.
  3. Read your results: See your profit, margin percentage, and markup.

Who Is This Profit Margin Calculator For?

  • E-commerce sellers: Calculate margins on products after all fees (Amazon, Etsy, eBay).
  • Freelancers: Ensure your project pricing covers all your costs.
  • Service businesses: Track profitability across different service offerings.
  • Side hustlers: Know if your side gig is actually making money.
  • Small business owners: Monitor financial health and make pricing decisions.

Profit Margin Benchmarks by Industry

IndustryTypical MarginNotes
Software / SaaS70-85%Low marginal costs once built
Consulting / Freelance50-80%Primary cost is your time
Digital Products60-90%Ebooks, courses, templates
Print on Demand15-35%Base cost + platform fees eat margin
Retail / E-commerce5-20%Competitive, high volume needed
Restaurants3-9%High costs, thin margins

Profit Margin Calculator FAQs

What is a good profit margin for a small business?

A good profit margin varies by industry. Generally, 10% is considered average, 20% is good, and 30%+ is excellent. Service businesses often see 50%+ margins while retail typically runs 5-10%. Compare your margin to industry benchmarks for the most relevant guidance.

What is the difference between gross margin and net margin?

Gross margin only subtracts direct costs (cost of goods sold) from revenue. Net margin subtracts ALL expenses including rent, salaries, marketing, and taxes. Net margin is the "true" profit. This calculator shows net margin by default.

How do I calculate profit margin percentage?

Profit margin percentage = (Revenue - Costs) / Revenue x 100. For example, if you sell a product for $100 and your total costs are $60, your profit is $40 and your margin is 40%. This calculator does this math automatically.

What is markup vs margin?

Markup is based on cost (how much you add to your cost). Margin is based on revenue (what percentage of the sale is profit). A 50% markup equals a 33% margin. A 100% markup (doubling your cost) equals a 50% margin.

Why is my profit margin decreasing?

Common reasons include: rising supplier costs, increased competition forcing lower prices, higher overhead expenses (rent, staff), inefficient operations, or offering too many discounts. Track your costs monthly to identify the specific cause.

How can I improve my profit margin?

Increase prices (test small increases first), reduce supplier costs (negotiate or find alternatives), cut unnecessary overhead, automate repetitive tasks, eliminate low-margin products, and focus on upselling higher-margin items.

What costs should I include in my calculation?

Include ALL business costs: product costs, shipping, packaging, platform fees (eBay, Etsy, Amazon), payment processing fees (Stripe, PayPal), marketing spend, software subscriptions, and a portion of overhead like rent and utilities.

Is a negative profit margin always bad?

Short-term, a negative margin can be strategic (startup phase, aggressive customer acquisition). Long-term, it is unsustainable. If your margin is consistently negative, you need to either raise prices or drastically cut costs to survive.