Gross Profit Calculator
Calculate gross profit and gross margin from revenue and cost of goods sold, or find the revenue needed to reach a target margin.
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About the Gross Profit Calculator
Gross profit is revenue minus the direct costs of producing goods or services (cost of goods sold). Gross margin is gross profit as a percentage of revenue. Both show how much money is left to cover operating expenses and profit. This calculator also finds the revenue you need to reach a target margin.
How to use it
- Enter your revenue and cost of goods sold.
- Optionally enter a target gross margin.
- Press Calculate gross profit to see gross profit, margin, markup and the revenue needed for your target.
Gross profit formulas
- Gross profit = revenue − cost of goods sold
- Gross margin = gross profit ÷ revenue × 100
- Markup = gross profit ÷ cost × 100
Typical gross margins
| Business type | Typical gross margin |
|---|---|
| Software and SaaS | 70% to 90% |
| Restaurants | 60% to 70% before labor |
| Retail | 25% to 50% |
| Manufacturing | 25% to 40% |
| Distribution | 15% to 30% |
Ranges vary widely by company and industry.
Frequently asked questions
How do I calculate gross profit?
Subtract cost of goods sold from revenue. $120,000 revenue minus $72,000 COGS is $48,000 gross profit.
What is gross margin?
Gross profit divided by revenue, shown as a percentage. In the example it is 40%.
Is gross profit the same as net profit?
No. Net profit also subtracts operating expenses, interest and taxes.
What costs are in COGS?
Direct costs such as materials, direct labor and manufacturing overhead. Marketing and rent for an office are usually operating expenses.
Margin or markup?
Margin is a percentage of revenue and markup is a percentage of cost. A 50% markup is a 33.3% margin.
Last reviewed: November 2026. Estimates only, not financial, tax or legal advice.