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Profit Margin Calculator

See how much of each sales dollar remains after direct costs.

Your numbers

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Gross profit margin
40%

Calculated from your inputs · rounded for display

Gross profit$40.00
Cost$60.00
Revenue$100.00

Gross profit only. Operating expenses, financing, and income taxes are not included.

Your calculation, step by step

No black boxes
  1. Gross profit = 100 − 60 = 40 USD.
  2. Margin = 40 ÷ 100 × 100 = 40%.

What if things were different?

Save up to three scenarios, then change your inputs to compare the possibilities.

How to use this calculator

  1. Enter your own values in the labeled fields. Check the units and assumptions before comparing results. Only the fields needed for your selected calculation mode are shown.
  2. Your answer updates automatically. Review the calculation steps to see exactly how it was calculated.
  3. Copy, share, save, or download your result. Saved inputs stay on this device.

How the calculation works

Gross margin = (revenue − cost) / revenue × 100

Gross margin uses revenue as the denominator. It shows what share of sales remains after the costs you enter. It is not the same as markup, which divides by cost. Use matching periods and comparable cost definitions, and remember that gross profit is not net profit after all business expenses.

A worked example

A $100 sale with $60 in direct costs earns $40 gross profit and a 40% gross margin.

Reading your result

Use the main result together with its units and supporting figures. Display values are rounded; calculations keep their underlying precision. A change in inputs or assumptions can change the answer. Compare the step-by-step working with your intended use before relying on an estimate.

Frequently asked questions

Is margin the same as markup?

No. Margin divides profit by revenue; markup divides it by cost.

Can the margin be negative?

Yes. Selling below cost produces a gross loss.

Sources & methodology

This calculator uses the mathematical identity and assumptions stated above. No current rates, prices, or external data are loaded. Conversion tools use international unit definitions.

Formula review: October 24, 2026. Read our methodology.