Profit Margin Calculator
Enter revenue and costs for the same period to see your profit or loss and profit margin.
Revenue and Costs
Add the expenses you want to include for the same period.
Results
Profit margin
22.5%
Share of revenue left after the costs you entered for this period.Profit or loss
$6,390
Use the same GST basis for both figures.
Profit Margin Formula
Profit is revenue minus costs for the same period. Divide that profit by revenue and multiply by 100 to get the profit margin. A 20% margin leaves 20 cents from every dollar of revenue after the costs you entered.
Gross profit margin uses the direct costs of earning the revenue. Net profit margin uses net profit from your profit and loss statement, after all expenses. A figure based on selected expenses tells you what remains after those expenses.
Margin and Markup Compared
Margin divides profit by revenue. Markup divides the same profit by cost. On $1,000 of revenue and $800 of costs, you make $200 in profit. Dividing $200 by $1,000 gives a 20% margin. Dividing $200 by $800 gives a 25% markup.
Read a Brokerage Margin Result
In this fictional example, a brokerage earns $28,400 in commission in one month. It records $16,700 in staff costs and $5,310 in overheads for that month. Using figures from its GST-exclusive accounts, $22,010 of total costs leaves $6,390 and a 22.5% margin.
Leaving out a $710 overhead makes the calculator show a 25% margin. Using a quarter’s overheads with one month’s commission skews the margin in the other direction. Take both totals from the same reporting period and use the same goods and services tax (GST) treatment in each period you compare.
Costs above revenue give a loss and a negative margin when revenue is positive. Equal positive revenue and costs give $0 profit and a 0% margin. At zero revenue the margin is undefined because division by zero has no result. Any costs still count towards the dollar loss.
