Gross Profit Margin Calculator
Calculate your gross profit margin by entering your revenue and cost of goods sold.
What is Gross Profit Margin?
Gross profit margin shows what percentage of revenue remains after subtracting the direct costs of producing goods or services (COGS). It does not account for operating expenses, taxes, or interest.
Gross Profit Margin Formula
Gross Profit Margin = (Revenue − COGS) ÷ Revenue × 100
Example: Revenue = $50,000 | COGS = $30,000 → Gross Profit = $20,000 → Gross Margin = 40%
Gross vs Net Profit Margin
Gross margin only considers production costs, while net margin deducts all expenses. To calculate net margin, visit our Net Profit Margin Calculator. For an overview of all margin types, see our main Profit Margin Calculator.
What is a Good Gross Profit Margin?
It varies by industry. Software: 70–80% | Retail: 20–50% | Manufacturing: 25–35% | Restaurants: 60–70%. Always benchmark against your sector.
Frequently Asked Questions
What is included in COGS?
COGS includes direct costs like raw materials, direct labor, and manufacturing overhead directly tied to production.
Does gross margin include salaries?
Only salaries directly tied to production. General salaries are operating expenses, not COGS.