How to Calculate Profit and Profit Margin
Profit is revenue minus costs, and margin turns that profit into a percentage of revenue. This guide explains both with a worked example.
What is the Profit Calculator?
Profit is total revenue minus total costs. Profit margin is profit divided by revenue and multiplied by 100, showing what share of revenue remains as profit. Revenue must be above zero for the margin to be meaningful; if costs exceed revenue, the result is a loss.
How to use it
- Enter your total revenue for the period.
- Enter your total costs for the same period.
- Read your profit (or loss) and the profit margin percentage.
Worked example
Revenue 10,000, costs 7,000: profit 3,000, margin 30%.
What is the profit and margin on revenue of 10,000 with costs of 7,000?
The profit is 3,000 and the margin is 30%. Subtract 7,000 from 10,000 to get 3,000, then divide 3,000 by 10,000 and multiply by 100 to get 30%.
Frequently asked questions
What if costs are higher than revenue?
The profit figure will be negative, which means a loss for that period. The margin will be negative too.
Should revenue and costs cover the same period?
Yes, both figures must cover the same period, such as one month, for the profit to be meaningful.