Profit Margin Calculator 2026: Are You Making Money on Every Sale?

Calculate all your margin metrics with our [Profit Margin Calculator](/calculators/finance/profit-margin-calculator).

The 4 Margin Metrics Every Business Owner Needs

1. Gross Profit Margin

(Revenue - Cost of Goods Sold) / Revenue

Example: $100 sale, $60 COGS = 40% gross margin

2. Operating Profit Margin

(Revenue - COGS - Operating Expenses) / Revenue

Example: $100 sale, $60 COGS, $25 overhead = 15% operating margin

3. Net Profit Margin

Net Income after tax / Revenue

Example: After taxes = 11.25% net margin

4. EBITDA Margin

Earnings Before Interest, Taxes, Depreciation, Amortization / Revenue. Useful for comparing businesses with different capital structures.

Industry Benchmark Margins (2026)

| Industry | Gross Margin | Net Margin |

|---|---|---|

| SaaS / Software | 70-85% | 15-30% |

| E-commerce retail | 30-45% | 2-5% |

| Restaurant | 60-70% | 3-5% |

| Manufacturing | 25-40% | 5-10% |

| Consulting | 60-80% | 10-25% |

| Grocery retail | 20-30% | 1-3% |

The Markup vs Margin Mistake That Kills Businesses

Markup is calculated on cost. Margin is calculated on price. They are NOT the same.

|---|---|---|---|

| $60 | 50% | $90 | 33% |

| $60 | 67% | $100 | 40% |

| $60 | 100% | $120 | 50% |

Adding 40% markup does NOT give you 40% margin — it gives you 28.6% margin. To achieve exactly 40% gross margin: Selling Price = Cost / (1 - 0.40) = $60 / 0.60 = $100.

Minimum Viable Margin by Business Type

| Business | Minimum Gross Margin |

|---|---|

| Service business | 50%+ (labor is the main cost) |

| Physical product | 40%+ to cover overhead |

| Digital product | 70%+ (scale without variable cost) |

| Retail | 25%+ (volume dependent) |

Related Business Tools

[Break-Even Calculator](/calculators/finance/break-even-calculator) — Revenue needed to cover costs
[Startup Runway Calculator](/calculators/finance/startup-runway-calculator) — Cash until you reach profitability
[ROI Calculator](/calculators/finance/roi-calculator) — Return on business investment

Profit Margin Calculator in 2026: Are You Actually Making Money on Every Sale?