Profit Margin Calculator
Calculate your gross and net profit margins instantly. Enter your revenue and costs to see exactly how profitable your business is.
Quick Calculator Get a fast estimate
R
R
R
Gross Profit Margin
40.00%
Gross Profit
R 4 000
Net Profit Margin
40.00%
Net Profit
R 4 000
Total Costs
R 6 000
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How to Use This Calculator
Enter your total revenue, cost of goods sold (COGS), and optional operating expenses. Results update instantly showing gross margin, net margin, and profit amounts.
Use the Extended Calculator below to compare product, service, and wholesale scenarios. The Professional Calculator adds multi-product analysis and break-even integration.
Profit Margin Formulas
Gross Profit Margin = (Revenue − COGS) ÷ Revenue × 100
Net Profit Margin = (Revenue − COGS − Operating Expenses) ÷ Revenue × 100
Need more detail?
Extended Calculator More options, charts, and scenario comparison
R
R
R
Gross Profit Margin
40.0%
Gross Profit
R 60 000
Net Margin
23.3%
Net Profit
R 35 000
Markup %
66.7%
Margin vs Markup Comparison
Industry Benchmarks (SA)
| Industry | Typical Gross Margin | Net Margin |
|---|---|---|
| Retail (General) | 25–45% | 2–8% |
| Food & Beverage | 55–70% | 3–9% |
| Professional Services | 40–60% | 15–30% |
| Construction | 15–25% | 2–6% |
| Software / SaaS | 65–85% | 15–40% |
| Your Business | 40.0% | 23.3% |
Example Calculation
Restaurant Example
A Cape Town restaurant earns R80,000 monthly revenue. Food costs (COGS) are R32,000. Rent, staff, utilities total R30,000.
Gross Margin = (80,000 − 32,000) ÷ 80,000 × 100 = 60%
Net Margin = (80,000 − 32,000 − 30,000) ÷ 80,000 × 100 = 22.5%
Net Profit = R18,000/month
SA Industry Margin Benchmarks
| Industry | Typical Gross Margin | Typical Net Margin |
|---|---|---|
| Retail (general) | 20–40% | 2–8% |
| Restaurant / Food | 60–70% | 3–15% |
| Professional Services | 70–85% | 15–35% |
| Construction / Building | 20–35% | 5–12% |
| Software / SaaS | 70–90% | 20–50% |
| Manufacturing | 25–45% | 5–15% |
Need full precision?
Professional Calculator Complete parameters, sensitivity analysis, and detailed breakdown
Multi-Product Analysis
| Product / Line | Revenue | COGS | Margin | |
|---|---|---|---|---|
| 40.00% | ||||
| 56.25% | ||||
| Total | R 280 000 | R 155 000 | 44.64% |
Fixed Costs (Monthly)
R
Net Profit Margin
28.57%
Gross Profit
R 125 000
Net Profit
R 80 000
Gross Margin
44.64%
Total Revenue
R 280 000
Break-Even Calculator (Unit Economics)
R
R
R
Break-Even Point
379 units
Break-Even Revenue
R 113 321
Contribution Margin
R 119 / unit
Break-Even Chart
Pricing Strategy: What-If Analysis
| Price Change | New Revenue | New Gross Margin | Net Profit Change |
|---|---|---|---|
| -10% | R 252 000 | 38.49% | R -28 000 |
| -5% | R 266 000 | 41.73% | R -14 000 |
| Current | R 280 000 | 44.64% | +R 0 |
| +5% | R 294 000 | 47.28% | +R 14 000 |
| +10% | R 308 000 | 49.68% | +R 28 000 |
| +15% | R 322 000 | 51.86% | +R 42 000 |
| +20% | R 336 000 | 53.87% | +R 56 000 |
Frequently Asked Questions
It depends on the industry. Retail businesses typically target net margins of 2–10%, service businesses 10–30%, and software/tech companies 20–50%. What matters most is tracking your margin over time — consistent improvement signals a healthy business.
Gross margin only deducts the direct cost of producing your product or service (COGS). Net margin deducts all costs including operating expenses like rent, salaries, and marketing. Net margin gives a more complete picture of actual profitability.
Margin is calculated as a percentage of selling price. Markup is calculated as a percentage of cost. A 50% markup on a R100 item gives a R150 selling price and a 33.3% margin. Confusing the two can lead to serious pricing errors.
No — use VAT-exclusive figures for margin calculations. VAT at 15% is collected on behalf of SARS and passed through your business. Always use ex-VAT revenue and ex-VAT costs when calculating true profit margins.