Gross Margin Calculator
Calculate gross profit, gross margin percentage, and markup from revenue and COGS. Compare up to 3 products, find required price for a target margin, and analyze break-even with fixed costs.
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Gross Profit
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Gross Margin % —
Markup % —
Extended More scenarios, charts & detailed breakdown ▾
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Gross Profit
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Gross Margin % —
Markup % —
Professional Full parameters & maximum detail ▾
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Margins
Gross Profit —
Gross Margin % —
Operating Margin % —
Unit Economics
Contribution Margin —
Gross Profit per Unit —
Break-even Units —
How to Use This Calculator
- Enter Revenue and COGS (Cost of Goods Sold).
- Gross profit, gross margin %, and markup % appear instantly.
- Use From Margin tab to find required revenue for a target margin.
- Use Compare Products tab to compare three products side by side.
- The Professional tab adds contribution margin, operating margin, and break-even units.
Formula
Gross Profit = Revenue − COGS
Gross Margin % = (Gross Profit / Revenue) × 100
Markup % = (Gross Profit / COGS) × 100
Example
Revenue $80K, COGS $48K: Gross Profit = $32K, Margin = 40%, Markup = 66.7%.
Frequently Asked Questions
- Gross margin = (Revenue − COGS) / Revenue × 100. It shows what percentage of revenue remains after paying for direct costs. A 40% gross margin means $0.40 of every dollar of revenue is gross profit.
- Gross margin is calculated as a percentage of selling price: (Price − Cost) / Price. Markup is calculated as a percentage of cost: (Price − Cost) / Cost. A 50% markup = 33.3% gross margin.
- Depends on industry: Software 70–80%, Retail 20–50%, Manufacturing 20–35%, Restaurants 60–70% (food cost ~30%). Higher is generally better, but varies by business model.
- Contribution margin = Revenue − Variable Costs (including COGS and variable OpEx). It shows how much each sale contributes to covering fixed costs and profit.
- Gross margin only subtracts COGS from revenue. Net margin subtracts all expenses including COGS, operating expenses, taxes, and interest. Net margin is always lower.