Free small business calculator
Profit Margin Calculator
Calculate profit margin from cost and revenue. Free small business pricing calculator with formula, examples, and related profit tools. No sign-up required.
Enter the minimum numbers needed to get a result.
Updated live as you type.
Planning estimate only. It does not include taxes, overhead allocation, depreciation, discounts, or other business-specific adjustments.
How does your margin compare?
Restaurant: Above average — Net margin is 40.0% (industry avg: 5%)View benchmarks →Retail: Above average — Net margin is 40.0% (industry avg: 3%)View benchmarks →Software / SaaS: Above average — Net margin is 40.0% (industry avg: 20%)View benchmarks →E-commerce: Above average — Net margin is 40.0% (industry avg: 10%)View benchmarks →Consulting: Above average — Net margin is 40.0% (industry avg: 22%)View benchmarks →Profit margin is the percentage of revenue that becomes profit after deducting costs, used to measure pricing effectiveness and overall business health.
Formula and example
Profit margin = (Revenue - Cost) / Revenue x 100
If your cost is $60 and your selling price is $100, profit is $40 and profit margin is 40%.
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Methodology & assumptions
Last updated: 2026-06-10Calculation method
Uses simple cost and revenue inputs to derive profit, margin, and markup. Assumes all costs are included in the cost figure. Does not account for taxes, overhead allocation, or multi-product mixes.
Data sources
Uses the numbers you enter and standard small-business finance formulas. Benchmark comparisons use HustleFin industry benchmark pages where available.
Limitations
For planning estimates only. Does not replace accounting records. Does not include operating expenses, taxes, or depreciation.
Input definitions
- Total cost: Product, labor, or service cost.
- Selling price or revenue: Amount charged to the customer.
Frequently asked questions
What is a good profit margin for a small business?+
It depends on the industry, but many small businesses use margin to compare whether pricing covers costs, overhead, and a reasonable profit buffer.
Is profit margin the same as markup?+
No. Profit margin divides profit by revenue. Markup divides profit by cost. The same sale can have different margin and markup percentages.
Should I use revenue or selling price?+
For a single item, use selling price. For a period or project, use total revenue and total cost for the same scope.
Can this replace accounting advice?+
No. This calculator is for planning and quick estimates. Use accounting records or a professional for financial reporting.
Related guides
Go deeper with in-depth guides on the concepts behind this calculator.
Next: What to do after this
Pick one next action. These are sequenced by the most common workflow after this calculation.
Continue the workflow
Estimate margin, convert margin to markup, then check the sales volume needed to break even.
Gross Margin Calculator
Calculate gross profit and gross margin from revenue and COGS.
Markup Calculator
Calculate selling price, markup, profit, and margin from cost.
Break Even Calculator
Find how many units or sales dollars you need to cover costs.