Profit Calculator

One subtraction, three profits

The arithmetic is a subtraction — profit = revenue − costs — and the margin is that profit as a share of revenue. In the worked example (computed by the same engine as the form above), 12,500 of revenue against 9,800 of costs yields 2,700, a 21.6% margin. What makes the number meaningful is what you put in the costs field: direct costs only give gross profit, add overheads for operating profit, add everything for the bottom line. The calculator doesn't decide for you — it makes each version instant so you can try all three.

The difference is not small. Hold the revenue at 12,500 and move only the cost total, and the same engine reports three different profits from the same sales:

• Gross — direct cost of goods only, 8,200: a 4,300 profit, a 34.4% margin.
• Operating — add rent, wages, and marketing, 9,800: 2,700 profit, 21.6% margin.
• Net — add interest and tax, 11,300: 1,200 profit, a 9.6% margin.

Nothing in those three rows is a different formula; the only thing that changed is which costs were counted. That is why a profit figure quoted without saying which costs it includes is close to meaningless — the margin on this one period ranges from 9.6% to 34.4% depending only on where you draw the line.

Why the margin divides by revenue

The margin this calculator reports is profit as a share of revenue: 2,700 ÷ 12,500 × 100 = 21.6%. Dividing the identical profit by cost instead would give a markup — a different, always larger percentage for the same profitable sale, because cost is the smaller number. Confusing the two matters because a figure read as a margin when it was quoted as a markup overstates how much of each sale you actually keep. The margin vs. markup arithmetic guide works the identity between the two percentages in full on fictional prices; the markup calculator is the right tool when you want to set a price up from a cost rather than read a margin back out of a completed sale.

Same profit, different margin

Profit and margin answer different questions, and the quickest way to feel the difference is to find two periods that produce the same profit. The example period turned 12,500 of revenue into 2,700 of profit at a 21.6% margin. A second, larger period that books 30,000 of revenue against 27,300 of costs lands on the very same 2,700 of profit — yet its margin is only 9%, because that profit is a much smaller slice of a much bigger top line. Both periods made the identical amount of money; one kept far more of each unit of revenue to do it. Profit tells you how much; margin tells you how hard the revenue had to work. A business can raise profit while its margin falls (chasing volume) or lift its margin while profit holds flat (trimming a shrinking line), and only reading the two figures together shows which of those is happening.

Unit economics: the optional third field

Supplying the units sold divides everything through: 50 revenue, 39.2 cost, and 10.8 profit per unit in the example. Per-unit profit is the number pricing decisions actually turn on — if it's thin, raising volume mostly raises workload. To ask the reverse question, "how many units until fixed costs are covered?", use the break-even calculator; to set a price from cost, the markup calculator is the right direction.

Margin and per-unit profit are properties of the rate at which you sell, not the amount. Double the example — 25,000 of revenue against 19,600 of costs over 500 units — and the totals scale while the per-unit figures do not budge: the same 50 of revenue, 39.2 of cost, and 10.8 of profit per unit, at the same 21.6% margin, on a larger 5,400 total. This is the practical meaning of "volume, not pricing": if the per-unit number is right, more units multiply it cleanly; if it is wrong, more units multiply the problem just as cleanly.

The quantity need not be whole items, either. It only has to be greater than zero, so it can be hours, kilograms, or litres. A 880 job that cost 572 to deliver over 40 hours works out to 22 of revenue, 14.3 of cost, and 7.7 of profit per hour — a 35% margin read on the clock instead of the shelf.

What a negative result means

When costs exceed revenue, the calculator does not refuse the input — it reports the loss. Entering 12,500 of revenue against 13,400 of costs returns -900 and a -7.2% margin: the negative sign is the whole answer. A loss is as real and as calculable as a gain, and a tool that balked at it would be useless exactly when a loss needs to be quantified. The margin goes negative by the same definition it is positive — profit over revenue — so there is no separate "loss mode" to switch into; the arithmetic simply runs through zero.

Where this calculation stops

This page implements one general definition: profit is revenue minus the costs you enter, and margin is that difference over revenue. It is deliberately a subtraction and nothing more. As the methodology page puts it, specific domains — "tax rules, regulated interest calculations, jurisdiction-specific rounding of currency — often impose their own conventions that a generic tool does not know." The calculator applies no tax rule, recognises no accounting standard, and takes no view on which costs belong in a period; those are decisions you make before you type, and the answer is only ever as right as the two totals you supply.

Two limits are worth stating plainly. First, profit is not cash: it compares revenue earned with costs incurred over a period, while the bank balance follows when invoices are actually paid and stock actually bought, so a 21.6%-margin month can still end with less money than it began. Second, the figures on screen are a cleanly rounded presentation of a more precise internal value — the engine holds full precision and the display shows at most six decimal places — so for chained work the methodology's advice applies: "prefer doing the whole calculation in one pass" rather than re-keying a rounded result into the next step.

There is a third limit that no calculator can lift for you. As the methodology page puts it, "a correct calculation can still be the wrong calculation for your situation — choosing the right formula for a real-world decision is judgment we cannot automate." This tool will faithfully subtract whatever you enter; it cannot tell you whether the cost total you chose is the one your question actually needed, or whether profit, margin, or per-unit profit is the figure the decision in front of you really turns on. The arithmetic is dependable; the framing is yours.

From one sale to a whole period

This calculator and the profit margin calculator run the same subtraction on different scales, and knowing which to reach for saves re-keying. The margin calculator is built around a single sale — one price, one cost — and reports the margin and the matching markup side by side. This page is built around totals for a period: all the revenue and all the costs of a day, an order, or a month, with an optional unit count that divides the result back down to a per-sale figure. Feeding the example's per-unit outputs — 50 of revenue and 39.2 of cost — into the single-sale margin calculator reproduces the period's 21.6% margin exactly, because the margin is scale-free: it is the same whether you measure it on one sale or on a thousand of them at the same prices. Start with whichever numbers you already have in hand, and the other figure is one field away.

Frequently asked questions

For the arithmetic behind the margin figure — why it differs from markup, and how to convert cleanly between the two — see the margin vs. markup arithmetic guide, or browse the full set of explainers in the guides index.

Your revenue and cost figures stay on your device — calculations run in the browser and are never sent to a server. Formulas are tested, typed functions; the methodology page documents the rounding policy.