Gross Profit Calculator
Calculate gross profit and gross margin from revenue and cost of goods sold (COGS).
Gross Profit
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Revenue
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COGS
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Gross Margin
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Markup
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Profit per Unit
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How to Use the Gross Profit Calculator
- Enter your revenue: Total sales or revenue amount.
- Enter COGS: Total cost of goods sold (direct costs to produce goods).
- Optionally enter units: Number of units sold for per-unit profit.
- View your results: Gross profit, gross margin, markup, and per-unit profit appear instantly.
Gross Profit Formula
Gross profit is calculated as:
Gross Profit = Revenue - Cost of Goods Sold
Gross margin percentage:
Gross Margin (%) = (Gross Profit / Revenue) × 100
Gross Profit Examples
| Revenue | COGS | Gross Profit | Gross Margin |
|---|---|---|---|
| $100,000 | $60,000 | $40,000 | 40% |
| $250,000 | $150,000 | $100,000 | 40% |
| $50,000 | $35,000 | $15,000 | 30% |
| $500,000 | $200,000 | $300,000 | 60% |
| $75,000 | $60,000 | $15,000 | 20% |
Understanding Gross Profit
Gross profit measures how efficiently a company produces its goods. It represents the revenue remaining after deducting the direct costs of producing the goods or services sold. This figure does not include operating expenses like rent, marketing, or administrative costs.
COGS (Cost of Goods Sold) includes direct costs such as raw materials, direct labor, manufacturing supplies, and shipping costs directly tied to production. It does not include indirect expenses like office rent or sales team salaries.
Frequently Asked Questions
What is a good gross margin?
Good gross margins vary by industry. Software/SaaS typically sees 70-85%, manufacturing 25-35%, retail 25-50%, and restaurants 60-70% on food. Compare your margin to industry averages for a meaningful benchmark.
What is the difference between gross profit and net profit?
Gross profit is revenue minus COGS (direct costs only). Net profit subtracts all expenses including operating costs, taxes, interest, and overhead. Gross profit shows production efficiency, while net profit shows overall profitability.
What is included in COGS?
COGS includes raw materials, direct labor, manufacturing overhead, packaging, and freight-in costs directly tied to production. It excludes selling, general, and administrative expenses (SG&A).