What is a good profit margin?

It varies by industry. Retail averages 2–5%, software companies often achieve 20–40%, and restaurants typically operate at 3–9%. Higher is better, but compare within your industry.

What is the difference between gross and net margin?

Gross margin subtracts only direct production costs (COGS). Net margin subtracts all costs including operating expenses, interest, and taxes. Net margin gives the full picture of profitability.

How can I improve my profit margin?

Raise prices, reduce direct costs, cut overhead, improve operational efficiency, or shift to higher-margin products. Usually a combination of these strategies is most effective.

Profit Margin Calculator

The Profit Margin Calculator finds your profit margin percentage — one of the most important indicators of business health. Enter your revenue and total costs, and the calculator returns your profit amount and margin percentage. A higher margin means more profit is retained per dollar of revenue.

Revenue / Selling Price ($)

Total Costs ($)

Frequently Asked Questions

Profit margin is the percentage of revenue remaining after subtracting costs. Formula: Profit Margin = (Revenue − Costs) / Revenue × 100.

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