What is the difference between gross profit and net profit?
Gross profit only subtracts the cost of goods sold. Net profit subtracts every expense, including operating costs, interest and taxes.
Gross Profit Calculator
See gross profit and gross margin from your revenue and cost of goods sold.
Your numbers
Use one sale, a month or a year — just keep revenue and cost of goods sold for the same period.
Direct costs of what you sold: products, materials and direct labor.
Result
Results update as you type.
Enter your values to see the result.
What is gross profit?
Gross profit is what is left from revenue after paying the direct cost of the goods you sold. It shows whether your products are priced above what they cost to make or buy — before rent, marketing, salaries and other operating expenses.
Gross profit
Revenue − cost of goods sold
Gross margin
Gross profit ÷ revenue × 100
Example
A shop has $50,000.00 in revenue for the quarter and $32,000.00 in cost of goods sold. Gross profit is $18,000.00, a 36% gross margin. As a markup on cost of goods sold, that is 56.25%.
What counts as cost of goods sold?
- Include: products bought for resale, raw materials, packaging that ships with the product, inbound freight and direct production labor.
- Leave out: rent, marketing, software, office staff and other costs you would pay even with no sales. Those are operating expenses and come out later, in net profit.
Frequently asked questions
Is gross margin the same as markup?
No. Gross margin divides gross profit by revenue; markup divides it by cost of goods sold. The calculator shows both.
What is a good gross margin?
It depends heavily on the industry. Compare against businesses like yours and against your own past periods rather than a single benchmark.
Can I use this for a single product?
Yes. Enter one unit’s selling price as revenue and its cost as COGS to see the gross profit and margin per unit.