Gross Profit Calculator
This calculator computes gross profit, gross margin percentage, and markup percentage from revenue and cost of goods sold. Optionally enter operating expenses to see operating income and net profit if taxes are included. Gross profit is the first and most important profitability test: it shows whether your core product or service is profitable before overhead. Use this when pricing products, reviewing financial statements, or comparing your margins to industry benchmarks.
Gross profit formulas
Gross profit = Revenue - COGS
Gross margin = Gross profit / Revenue x 100%
Markup = Gross profit / COGS x 100%
Operating income = Gross profit - Operating expenses
Net profit = Operating income - Tax and interest
Gross profit calculator: frequently asked questions
What is gross profit?
Gross profit = Revenue minus cost of goods sold (COGS). It is the profit remaining after deducting the direct costs of producing goods or services, before operating expenses, interest, or taxes.
What is the difference between gross margin and markup?
Gross margin is gross profit expressed as a percentage of revenue: (Gross profit / Revenue) x 100. Markup is gross profit expressed as a percentage of cost: (Gross profit / COGS) x 100. A 50% markup equals a 33.3% gross margin.
What is a good gross margin?
It depends on the industry. Software: 70-85%. Retail: 25-50%. Manufacturing: 20-40%. Grocery: 20-30%. Compare to industry peers from public financial filings.
How does gross profit differ from net profit?
Gross profit only deducts COGS. Net profit also deducts operating expenses (salaries, rent, marketing), interest, and taxes. This calculator shows net profit when you enter operating expenses.
What is included in cost of goods sold?
COGS includes direct material costs, direct labor, and manufacturing overhead allocated to production. It does not include selling, general, and administrative expenses (SG&A), which are operating expenses.
Official sources
- U.S. Securities and Exchange Commission: Beginners' guide to financial statements.
- IRS Publication 334: Tax guide for small business (COGS).
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.