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Profit Margin Calculator

Enter revenue, cost of goods, and operating expenses to see gross profit, gross margin, and net margin instantly.

Updated June 2026 · Editorial standards

Income Statement

$
$
$
Gross Profit
$200,000
Gross Margin %
40.0%
Operating Income
$100,000
Net Margin %
20.0%

On $500,000 revenue: gross margin 40.0%, operating margin 20.0%. Gross profit: $200,000, operating income: $100,000.Gross margin benchmarks vary by industry: SaaS 70%+, retail 20–40%, manufacturing 25–35%. Net margin below 5% is thin — above 20% is strong for most industries.

By the KalkWise Editorial Team Reviewed for accuracy Updated June 2026

What is the profit margin calculator — gross & net margin?

In short

Gross margin = (revenue − COGS) ÷ revenue × 100. Net profit margin = operating income ÷ revenue × 100. A 10% net margin is considered healthy for most industries; SaaS companies often exceed 20–30%.

Calculates gross profit, gross margin %, operating income, and net margin % from revenue, cost of goods sold, and operating expenses.

How to use this calculator

  1. 1Enter total revenue for the period.
  2. 2Enter cost of goods sold (COGS) — direct costs of production.
  3. 3Enter operating expenses (SG&A, R&D, depreciation — everything except COGS).

The formula

gross profit=revenue−COGS
gross margin=gross profitrevenue×100
operating income=gross profit−opex
Gross Profit = R − C; Gross Margin = Gross Profit ÷ R; Operating Income = Gross Profit − X; Net Margin = Operating Income ÷ R
R
— Revenue
C
— Cost of Goods Sold
X
— Operating Expenses

Worked example

The scenario

$500K revenue, $300K COGS, $100K operating expenses.

gives

The result

Gross profit = $200K (40% margin). Operating income = $100K (20% net margin).

Common use cases

  • Track profitability over time to identify trends.
  • Compare margins to industry benchmarks.
  • Identify whether cost issues are in COGS (operations) or opex (overhead).
  • Set pricing to achieve target margins.

Limitations & assumptions

  • Does not include interest or taxes (these would be needed for true net income).
  • COGS and opex classification varies by accounting policy.
  • One-time items can distort margins — look at trends, not single periods.

Frequently asked questions

Gross margins vary widely by industry: SaaS 70–80%, retail 20–40%, manufacturing 25–35%, restaurants 60–70% (on food cost). Compare within your sector.

Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.