Profit Calculator
Profit is the financial reward for running a business — the amount that remains from revenue after all costs are subtracted. This calculator goes beyond a simple profit figure: it shows profit amount, gross margin percentage, and markup percentage simultaneously, giving you a complete financial picture of any sale or product line. Understanding all three together makes pricing decisions much clearer.
Three input modes cover different real-world scenarios. If you know your cost and revenue, the calculator shows profit, margin, and markup. If you know your cost and want to target a specific margin, it calculates the selling price and resulting markup. If you know your cost and want a specific markup, it finds the selling price and the corresponding margin. This flexibility means you can use it both to analyse current performance and to set prices for new products or services.
The distinction between profit, margin, and markup — three closely related but different concepts — is a frequent source of confusion. Profit is an absolute amount in currency. Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. The same deal produces three different numbers, and confusing them leads to systematic pricing errors. This calculator makes the relationship concrete by showing all three at once and labelling them clearly, so you always know exactly which metric you are working with.
Formula
Profit = Revenue − Cost Margin % = (Profit ÷ Revenue) × 100 Markup % = (Profit ÷ Cost) × 100
Profit is the difference between what you sell for and what it costs. Margin expresses that profit as a percentage of revenue; markup expresses it as a percentage of cost. Both describe the same profit from different perspectives.
Worked Examples
Frequently Asked Questions
How do I calculate profit?▾
Subtract the total cost from the total revenue. If you sell a product for £100 and it costs £60 to produce and deliver, your gross profit is £40. Net profit subtracts all other business expenses (overheads, taxes, interest) on top of that — this calculator focuses on gross profit.
What is the difference between gross and net profit?▾
Gross profit is revenue minus the direct cost of goods sold (materials, direct labour, manufacturing costs). Net profit subtracts all expenses from gross profit — rent, salaries, marketing, taxes, interest, and depreciation. A business can have a healthy gross profit but thin or negative net profit if overheads are high. This calculator shows gross profit.
How do I find selling price from a target margin?▾
Divide the cost by (1 − margin as a decimal). For a 30% margin on a £50 cost: £50 ÷ 0.70 = £71.43 selling price. This formula is essential for pricing products where you have a required margin target — it ensures you set the price correctly rather than applying a markup and hoping the margin works out.
Is profit the same as margin?▾
No. Profit is an absolute amount in currency (e.g. £40). Margin is profit expressed as a percentage of revenue (e.g. 40%). A high margin on a small sale can mean less total profit than a low margin on a large sale. Both matter — margin tells you how efficiently each sale generates profit; total profit tells you the actual financial result.
What is a good gross profit margin?▾
Gross profit margin benchmarks vary by industry. Software and SaaS businesses typically achieve 70–90% gross margins. Retail ranges from 20–50%. Restaurants see 60–70% on food cost alone but much lower all-in. Professional services and consulting often run 50–70%. Compare your margin to industry-specific benchmarks, not a universal standard.
How do I improve my profit margin?▾
There are two levers: increase revenue while holding costs steady, or reduce costs while maintaining revenue. In practice this means: raising prices (even small increases have outsized impact on margin), reducing variable costs through supplier negotiation or process improvement, increasing average order value through upselling, and discontinuing low-margin products. Use this calculator to model the impact of each change before implementing it.
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All calculations are for informational purposes only. They should not replace professional financial, tax, or legal advice. Always consult a qualified professional for decisions affecting your finances or business.