Free pricing & profit tool
Gross Profit Calculator: Profit, Margin and Markup
Gross profit is revenue minus the direct cost of what you sold. Divide it by revenue for gross margin, or by cost for markup. With $250,000 in revenue and $90,000 of cost of goods sold, gross profit is $160,000, the gross margin is 64% and the markup is 177.8%. Enter your own revenue and cost below to see all three.
Prepared by Prospyr · Reviewed October 11, 2026 · Free, no sign-up, runs in your browser
For the month, quarter or year you are measuring.
Direct cost of what you sold: product, supplies and other direct costs. Not rent or office payroll.
Gross profit
$160,000
Gross margin
64%
gross profit ÷ revenue
Markup
177.78%
gross profit ÷ cost
For one item or service, use the margin calculator or the markup calculator.
A math aid. What counts as cost of goods sold depends on your business and tax treatment; confirm it with your accountant.
Priced it? Then check what each service actually earns. See revenue per provider and service mix in Prospyr →
The formulas
- Gross profit = revenue − cost of goods sold.
- Gross margin % = gross profit ÷ revenue × 100.
- Markup % = gross profit ÷ cost of goods sold × 100.
Worked example with placeholder numbers: $80 of revenue and $32 of cost give $48 of gross profit, a 60% margin and a 150% markup. These are example inputs, not benchmarks for your practice.
Related tools
For one item or service, use the margin calculator or the markup calculator. To work out what goes into cost, use the cost of goods sold calculator, and to see what is left after overhead, use the EBITDA calculator.
Frequently asked questions
How do you calculate gross profit?
Subtract cost of goods sold from revenue. $80 of revenue with $32 of direct cost leaves $48 of gross profit. Gross profit is a dollar amount; gross margin expresses it as a percent of revenue.
What is the difference between gross profit and net profit?
Gross profit subtracts only the direct cost of what you sold. Net profit subtracts every other expense too, such as rent, payroll, marketing and software. A practice can have a healthy gross profit and a thin net profit.
What is the difference between gross margin and markup?
Gross margin is gross profit divided by revenue. Markup is gross profit divided by cost. The same $48 of profit on $80 of revenue is a 60% margin and a 150% markup, so be clear about which one a number means.
What counts as cost of goods sold in a practice?
Generally the direct cost of the products and supplies you sold or used in treatments. Which costs belong there, including any direct labor, depends on your business and how you report for tax, so confirm it with your accountant.
Can gross profit be negative?
Yes. If cost of goods sold is higher than revenue, gross profit and margin are negative. The calculator shows the negative number rather than hiding it.
Where do I find revenue and cost of goods sold?
On your profit and loss statement, or in your accounting software for the period you are measuring. Use the same period for both numbers, and use revenue net of refunds.
Sources and scope
- IRS Publication 334, Tax Guide for Small Business
Explains how to figure cost of goods sold and gross profit for a small business.
Arithmetic on the numbers you enter; the example figures are placeholders, not benchmarks. This is not tax or accounting advice, and what counts as cost of goods sold depends on your business.