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Profit Calculator

Follow revenue down the income statement. Enter revenue, cost of goods sold, operating expenses and a tax rate to see gross profit, operating profit and net profit, each with its margin as a percentage of revenue.

Quick examples
$
$

Direct costs of what you sold: stock, materials, production labor.

$

Rent, salaries, marketing, software, utilities.

%
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Net profit$6,320.00
Net margin
12.64%
Gross profit
$20,000.00
Gross margin
40%
Operating profit
$8,000.00
Operating margin
16%
Tax
$1,680.00

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      Formula

      Gross profit = revenue − cost of goods sold
      Operating profit = gross profit − operating expenses
      Net profit = operating profit − tax
      Margin % = profit ÷ revenue × 100

      How to use it

      1. Enter revenue for the period, or the price of a single sale.
      2. Enter the direct cost of the goods or services sold.
      3. Enter operating expenses — overheads that are not tied to a single sale.
      4. Enter the tax rate on profit, or 0 to see profit before tax.

      Worked examples

      $50,000 revenue, $30,000 cost of goods, $12,000 expenses and 21% tax

      Gross profit
      $20,000.00
      Gross margin
      40%
      Operating profit
      $8,000.00
      Operating margin
      16%
      Tax
      $1,680.00
      Net profit
      $6,320.00
      Net margin
      12.64%

      $120,000 revenue, $45,000 direct costs and $50,000 of overhead, before tax

      Gross profit
      $75,000.00
      Gross margin
      62.5%
      Net profit
      $25,000.00
      Net margin
      20.83%

      Three levels of profit

      Gross profit shows whether your pricing covers what the product itself costs. Operating profit shows whether the business works once rent, wages and marketing are paid. Net profit is what is left for the owners after tax.

      A business can have a strong gross margin and still lose money if overheads are too heavy, which is why it helps to look at all three.

      About the tax estimate

      Tax is applied as a flat percentage of operating profit, and only when that profit is positive. Real tax bills depend on the business structure, deductions, interest and where you operate — 21% is the US federal corporate rate, but pass-through businesses are taxed at the owner’s personal rate. Treat the after-tax figure as an estimate, not tax advice.

      Questions people ask

      What is the difference between gross profit and net profit?

      Gross profit subtracts only the direct cost of what was sold. Net profit subtracts every cost, including overheads and tax. $50,000 of revenue with $30,000 of direct costs is $20,000 of gross profit; after $12,000 of expenses and 21% tax, net profit is $6,320.

      How do I calculate net profit margin?

      Divide net profit by revenue and multiply by 100. $6,320 on $50,000 of revenue is a 12.64% net margin.

      Is profit the same as cash flow?

      No. Profit counts sales when they are earned and costs when they are incurred. Cash flow counts money when it moves. A profitable business can run short of cash if customers pay late or stock builds up.

      Related calculators

      Profit Margin CalculatorMargin, markup and profit from cost and price — or solve for either.EBITDA CalculatorEBITDA, EBIT and EBITDA margin from the income statement.Break-Even CalculatorUnits and revenue needed to cover your costs.Markup CalculatorSelling price from cost and markup, with the margin it really gives.Revenue Growth CalculatorGrowth rate between two periods, and the compound rate per period.