Gross Profit Calculator
Calculate gross profit, margin, and markup from revenue and cost of goods sold, with a visual breakdown. Free, no login, nothing stored.
Gross profit does not account for operating expenses, tax, or interest - see the FAQ for how it differs from net profit.
Revenue Breakdown
What Is Gross Profit?
Gross profit is the amount left over after subtracting the direct cost of producing or acquiring what you sold (Cost of Goods Sold, or COGS) from your total revenue. It shows how efficiently a business turns raw materials, inventory, or direct labour into sales, before accounting for overheads like rent, salaries, marketing, or interest.
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 (Net Sales) for the period.
- Enter your Cost of Goods Sold (COGS) - direct costs like raw materials, manufacturing, or purchase cost of goods resold.
- Results update instantly - Gross Profit, COGS as a percentage of revenue, Markup percentage, and your Gross Profit Margin.
- The bar below visualises how your revenue splits between cost and profit.
Gross Profit Formulas
Gross Profit = Revenue - COGS
Gross Margin % = (Gross Profit / Revenue) x 100
Markup % = (Gross Profit / COGS) x 100
Gross Margin vs Markup - Why They're Different Numbers
Margin and markup both measure profitability but use different denominators, so they're never the same number for the same sale. Margin is profit divided by the selling price (revenue); markup is profit divided by the cost. A product bought for INR 100 and sold for INR 150 has a 50% markup (profit of 50 over a cost of 100) but only a 33.3% margin (profit of 50 over a selling price of 150).
| Metric | Formula | Answers the question |
|---|---|---|
| Gross Margin | Profit / Revenue | What share of each rupee of sales is profit? |
| Markup | Profit / Cost | How much did I add on top of my cost? |
Typical Gross Margin Ranges by Industry
| Industry | Typical Gross Margin Range |
|---|---|
| Retail and trading | Roughly 20% - 35% |
| Restaurants and food service | Roughly 60% - 70% (on food cost alone) |
| Manufacturing | Roughly 25% - 40% |
| Software and SaaS | Roughly 70% - 90% |
| Construction and contracting | Roughly 15% - 25% |
These are broad, commonly cited indicative ranges, not precise benchmarks - actual margins vary widely by business model, scale, and competitive positioning even within the same industry.
Who Is This Calculator For?
- Small business owners and retailers checking whether their pricing covers costs with a healthy margin.
- Founders and finance teams tracking gross margin trends over time.
- Anyone setting prices who wants to see the difference between markup and margin before deciding.
Frequently Asked Questions
What is the difference between gross profit and net profit?
Gross profit only subtracts the direct cost of goods sold from revenue. Net profit goes further, also subtracting operating expenses, interest, taxes, and all other costs of running the business, giving the actual bottom-line profit.
What should be included in COGS?
COGS typically includes the direct costs of producing or acquiring what you sold - raw materials, direct labour involved in production, and the purchase cost of inventory resold. It generally excludes indirect costs like rent, administrative salaries, and marketing, which are operating expenses instead.
Why are margin and markup different for the same numbers?
Because margin divides profit by the selling price while markup divides profit by the cost - two different denominators for the same profit amount, so they will always produce different percentages except in the unusual case of a 0% profit.
What does a negative gross profit mean?
It means your cost of goods sold is higher than your revenue, so you're losing money on each unit sold before even accounting for other business expenses. This usually signals a pricing or cost structure problem that needs urgent attention.
Is a higher gross margin always better?
Generally yes, since it means more of each sale is available to cover operating expenses and generate net profit, but it depends on context - some business models intentionally run lower margins at higher volume, while others rely on high margins at lower volume.
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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