What is a good profit margin?

Net profit margins vary widely by industry. Retail averages 2–5%, while software businesses may see 20%+ margins. Gross margins above 50% are generally considered healthy for many sectors.

Profit Margin Calculator

Analyze gross margin and operating margin to understand profitability at each stage of your income statement.

This tool runs in your browser. None of your data is saved or sold.

Revenue ($)

COGS ($)

Operating expenses ($)

Tax rate (%)

About This Calculator

This calculator shows both gross margin (revenue minus COGS, expressed as a %) and operating margin (after operating expenses). Gross margin reflects your product economics; operating margin reflects how efficiently you run the business. Both are essential benchmarks for evaluating performance against industry norms.

Estimates only — not financial, tax, legal, or investment advice. Verify important results with a qualified professional before making decisions.

gross margin = (revenue − COGS) ÷ revenue × 100; operating (EBIT) margin = (revenue − COGS − OpEx) ÷ revenue × 100; net profit (after tax) = EBIT − EBIT × tax rate