Profit Calculator

Profit Calculator

Calculate profit from revenue and costs. The result shows how much money is left after expenses, both as an absolute amount and as a percentage of revenue.

Profit formula

• Profit: profit = revenue - total costs
• Profit margin: margin = profit / revenue x 100

It matters which costs you include, because that choice defines which kind of profit you are measuring:

• Gross profit subtracts only the direct cost of the goods sold: gross profit = revenue - cost of goods sold.
• Net profit subtracts everything: net profit = revenue - all expenses, including overheads such as rent, software, salaries, fees, and advertising.

Gross profit tells you whether the products themselves make money. Net profit tells you whether the business as a whole does. A store can have a strong gross profit and still lose money once fixed costs are counted.

Worked example

An online shop has monthly revenue of 12,000. The goods it sold cost 7,200, and its other expenses for the month (fees, software, advertising, packaging) total 3,000.

• Gross profit: 12,000 - 7,200 = 4,800, a gross margin of 4,800 / 12,000 = 40%
• Net profit: 12,000 - 7,200 - 3,000 = 1,800, a net margin of 1,800 / 12,000 = 15%

The gap between 40% and 15% is the cost of running the business rather than the cost of the products, and it is the number that overhead decisions actually move.

When to use this calculator

• Monthly close. Total up revenue and expenses to see the period's profit before you commit to new spending.
• Testing a new supplier quote. Swap the new unit cost into your figures and see how gross profit changes across expected volume.
• Evaluating marketplace selling. Include listing fees, commission, and payment processing as costs to see what a channel really earns, treating any fee percentage you use as an example value that you should confirm against the platform's current schedule.
• Sizing a promotion. Model lower revenue per unit against higher volume to check whether the campaign leaves you with more profit or just more sales.

Common mistakes

• Reporting gross profit as if it were net profit; they answer different questions.
• Forgetting per-order costs such as shipping supplies, transaction fees, and returns, which quietly compress the real margin.
• Counting revenue when an order is placed but costs when a bill arrives, which distorts a single month's picture in either direction.
• Ignoring your own time. For small sellers, unpaid labour is a real input; profit that only exists because your hours are free can be misleading.
• Mixing currencies or tax treatments; keep revenue and costs on the same basis, either both including sales tax or both excluding it.

Related calculators

The Etsy fee calculator, Amazon fee calculator, and eBay fee calculator estimate the platform costs that belong in your expense total. The discount percentage calculator helps you price promotions, and the inventory value calculator tracks the stock your cost of goods figure is drawn from.