Profit Margin Calculator

Calculate gross margin, operating margin, net profit margin, break-even units, pricing strategy, and target selling prices with a free online profit…

Formula

How to calculate profit margin

Profit margin shows how much profit remains after costs and expenses are subtracted from revenue. Use gross margin for direct costs, operating margin for business expenses, and net margin for final profitability.

Gross margin = Gross profit ÷ Revenue × 100
Net margin = Net profit ÷ Revenue × 100

Break-even

How to calculate break-even units

The break-even point tells you how many units you need to sell before the business starts making profit. It compares fixed costs with the contribution margin per unit.

Break-even units = Fixed costs ÷ (Selling price − Variable cost)
Contribution margin = Selling price − Variable cost

Use cases

When to use this profit margin calculator

Use it before setting prices, sending quotes, estimating project profitability, planning discounts, or reviewing business performance.

Calculate gross, operating, and net profit margins

Quickly check profitability, pricing, break-even volume, and margin impact before making a billing or pricing decision.

Estimate break-even units and break-even revenue

Quickly check profitability, pricing, break-even volume, and margin impact before making a billing or pricing decision.

Compare pricing strategies before setting a selling price

Quickly check profitability, pricing, break-even volume, and margin impact before making a billing or pricing decision.

Check how COGS, fixed costs, and overhead affect profit

Quickly check profitability, pricing, break-even volume, and margin impact before making a billing or pricing decision.

Find the sales volume needed for a target profit

Quickly check profitability, pricing, break-even volume, and margin impact before making a billing or pricing decision.

Review margin benchmarks and pricing scenarios

Quickly check profitability, pricing, break-even volume, and margin impact before making a billing or pricing decision.

Calculator details

Profit Margin Calculator formula, assumptions, and examples

Last updated: July 2026

Formula used

Formula used

Profit margin = (revenue − cost) ÷ revenue × 100.

Assumptions

Assumptions

  • Revenue and cost values are entered for the same period or item.
  • Taxes, overhead, and fees are included only when entered.
  • The result is an estimate of margin, not a full profit-and-loss statement.

Example calculation

Example calculation

If revenue is $1,000 and cost is $650, profit is $350 and margin is 35%.

When to use this calculator

When to use this calculator

Use it when pricing products, services, projects, or quotes before sending a client invoice.

Disclaimer

Disclaimer

This calculator is for estimation and educational use only. It does not replace professional financial, tax, legal, mortgage, investment, or accounting advice.

Questions

Frequently Asked Questions

What is profit margin?

Profit margin measures how much profit a business keeps from its revenue. Gross margin compares gross profit to revenue, while net margin compares net profit after expenses to revenue.

How do I calculate gross profit margin?

Subtract cost of goods sold from revenue to get gross profit, then divide gross profit by revenue and multiply by 100.

What is the break-even point?

The break-even point is the sales volume where revenue equals total costs. At break-even, the business has no profit and no loss.

Can I use this calculator for pricing decisions?

Yes. The pricing strategy tab helps estimate cost-plus, target-margin, competitive, value-based, and psychological prices. Use it for planning, and verify important financial decisions with an accountant or advisor.

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