Gross Profit Calculator
Calculate gross profit, gross margin, and markup from your revenue and cost of goods sold, with a visual breakdown. Free, no login, nothing stored.
Revenue Breakdown
Gross profit only accounts for direct production costs - it does not include operating expenses, tax, or interest.
What Is Gross Profit?
Gross profit is the amount left over after subtracting the direct cost of producing or acquiring what you sold - your Cost of Goods Sold (COGS) - from your total revenue. It's one of the first numbers businesses look at to understand how efficiently they're pricing and producing, before accounting for overheads like rent, salaries, marketing, or taxes.
Free, No Login, No Data Stored
This calculator runs entirely in your browser. There is no sign-up, no account, and nothing you enter is saved, tracked, or sent anywhere. It's free to use as many times as you need.
How to Use This Gross Profit Calculator
- Enter your Total Revenue (or Sales) for the period.
- Enter your Cost of Goods Sold - the direct cost of the materials, production, or goods purchased for resale.
- The visual bar instantly shows how your revenue splits between COGS and Gross Profit.
- Results update live - Gross Profit, Markup, COGS as a percentage of Revenue, and your Gross Profit Margin.
Gross Profit Formulas
Gross Profit = Revenue - Cost of Goods Sold (COGS)
Gross Profit Margin % = (Gross Profit / Revenue) x 100
Markup % = (Gross Profit / COGS) x 100
Gross Margin vs Markup - Why They're Different
These two numbers are commonly confused because they use the same gross profit figure, but divide it by different bases. Margin is gross profit as a percentage of revenue. Markup is gross profit as a percentage of cost. For example, if something costs INR 100 and sells for INR 150, the gross profit is INR 50 - that's a 50% markup on cost, but only a 33.3% margin on the selling price. Mixing these up is a common pricing mistake that can lead businesses to underprice their products.
Gross Profit vs Operating Profit vs Net Profit
| Profit Level | What's Subtracted | What It Shows |
|---|---|---|
| Gross Profit | Cost of Goods Sold (COGS) only | How efficiently you produce or source what you sell |
| Operating Profit | COGS plus operating expenses (rent, salaries, marketing, etc.) | How the core business performs before interest and tax |
| Net Profit | COGS, operating expenses, interest, and tax | What's actually left for the business after everything |
Who Is This Calculator For?
- Small business owners and retailers checking pricing and product-level profitability.
- Freelancers and service providers understanding how much of their revenue covers direct costs versus profit.
- Students and finance learners understanding the difference between margin and markup.
Frequently Asked Questions
What counts as Cost of Goods Sold (COGS)?
COGS includes the direct costs of producing or acquiring what you sold - raw materials, direct labour involved in production, and the purchase cost of goods bought for resale. It does not include indirect costs like rent, marketing, administrative salaries, or delivery expenses, which are typically counted under operating expenses instead.
Is a higher gross profit margin always better?
Generally yes, since it means more of each rupee of revenue is retained before other expenses, but what counts as a "good" margin varies enormously by industry - a grocery retailer and a software company have very different typical margins, so compare against others in your specific sector rather than a universal benchmark.
What is the difference between gross profit and net profit?
Gross profit only subtracts the direct cost of goods sold. Net profit subtracts everything - COGS, operating expenses, interest, and tax - leaving the actual bottom-line profit. A business can have a healthy gross profit but still post a net loss if operating expenses are too high.
Why is my markup percentage higher than my margin percentage?
Markup is calculated on cost, which is a smaller number than revenue (assuming you're profitable), so dividing the same profit figure by a smaller base always produces a larger percentage. Margin, calculated on revenue, will always be numerically smaller than markup when there's a profit.
Can gross profit be negative?
Yes, if your Cost of Goods Sold exceeds your revenue, you have a gross loss - meaning you're losing money on production or sourcing alone, before even considering other business expenses. This calculator flags this scenario with a warning.
Does gross profit include GST or other taxes?
Revenue and COGS figures used for gross profit calculations should typically exclude GST, since GST collected on sales isn't your revenue and GST paid on purchases isn't your cost - it's a pass-through tax. Use your net-of-GST sales and purchase figures for an accurate gross profit calculation.
Is this calculator free to use?
Yes, completely free, with no login and no data stored, and works on both mobile and desktop.
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