Profit Margin Calculator
Calculate your business profit margin instantly. Enter your revenue and costs to see your profit and profit margin percentage in seconds. Free, fast and easy to use.
How to Use
Enter your total revenue.
Enter your total costs.
Click Calculate Profit Margin.
Your profit and profit margin will appear instantly.
Profit Margin Calculator
Enter your revenue and costs below to calculate your profit, profit margin percentage and understand how much of your revenue remains after costs.
Example Calculation
This example shows how the calculator works using sample figures.
Example
Revenue: £10,000
Costs: £7,500
Profit: £2,500
Profit Margin: 25%
Calculation Formula
Profit = Revenue − Costs
£10,000 − £7,500 = £2,500
Profit Margin = (Profit ÷ Revenue) × 100
(£2,500 ÷ £10,000) × 100 = 25%
This example demonstrates how profit margin is calculated. Enter your own revenue and costs into the calculator above to calculate your own results instantly.
What Do These Results Mean?
Profit Amount – The amount of money you earn after subtracting the cost price from the selling price.
Profit Margin – The percentage of your selling price that represents profit. A higher profit margin generally means your business keeps more profit from each sale.
Markup – The percentage added to your cost price to determine the selling price. Markup is commonly used when pricing products and services.
Profit Margin Calculation Explained
The Profit Margin Calculator compares your revenue with your costs to show how much profit your business makes and what percentage of revenue remains as profit.
Revenue
Revenue is the total amount of money generated from sales before costs and expenses are deducted.
Total Costs
Total costs represent the expenses associated with generating that revenue.
Profit
Profit is the amount remaining after total costs are subtracted from revenue.
Profit Margin Percentage
Profit margin shows profit as a percentage of revenue, making it easier to understand how much of each pound, dollar or other currency unit of revenue remains after costs.
Interpreting the Result
A higher profit margin means a larger proportion of revenue remains after the costs entered into the calculator. A lower margin means costs are consuming a greater proportion of revenue.
Profit Margin Terms Explained
Understand the key financial terms used in the Profit Margin Calculator.
Revenue
The total income generated from sales before costs and expenses are deducted.
Cost
The amount spent to produce, purchase or provide the goods or services associated with the revenue entered.
Profit
The amount remaining after costs are deducted from revenue.
Profit Margin
The percentage of revenue that remains as profit after the costs entered into the calculator have been deducted.
Profit Margin Percentage
Profit expressed as a percentage of revenue. This makes it easier to compare profitability across different sales amounts, products or periods.
Loss
A loss occurs when the costs entered are greater than the revenue, resulting in a negative profit.
Frequently Asked Questions
What is profit margin?
Profit margin is the percentage of your revenue that remains after deducting your business costs. It shows how much profit you make from every unit of revenue and is a useful measure of your business's profitability.
What is the difference between profit margin and markup?
What is a good profit margin?
A good profit margin depends on your industry. Many businesses aim for a profit margin of 10% to 20% or higher, although this varies by business type.
Can I use this calculator for any business?
Yes. This calculator is suitable for small businesses, freelancers, self-employed professionals and companies across most industries.
Profit margin is based on the selling price, while markup is based on the cost price. Although they are related, they measure profitability in different ways and are not the same percentage.