Margin formula
Margin = (revenue − direct cost) ÷ revenue. Margin describes the share of selling revenue left after the direct cost.
Free profit margin calculator
Calculate profit margin without confusing it with markup.
Calculate gross profit, profit margin, and markup from revenue and direct cost, then test a target margin price.
How the calculation works
Use consistent inputs and keep the result in context.
Markup formula
Markup = (revenue − direct cost) ÷ direct cost. Markup describes how much was added to cost. A 50% markup does not produce a 50% margin.
Use the right cost
This page calculates gross margin. Operating profit also includes payroll, rent, software, marketing, interest, and other overhead. Keep the label clear when sharing the result.
Continue planning
Connect the number to the operating decision.
Use the result as a starting estimate, document the assumptions, and replace them with actual records as the business operates.