Free calculatorTax year 2026/27
Gross profit calculator
Calculate gross profit, gross margin and mark-up from sales and cost of sales.
The calculator
How the gross profit calculator works
Enter your sales and cost of sales and the calculator works out your gross profit, gross margin (profit as a percentage of sales) and mark-up (profit as a percentage of cost). These are the headline numbers behind a healthy business — they show how much each sale contributes before overheads.
Tracking margin over time reveals pricing and cost problems early. Our management-accounts and consultancy services turn these figures into decisions.
Margin and mark-up are not the same number
Mark-up is the amount added to cost; margin is that amount as a share of the selling price. A 50% mark-up is a 33% margin. Confusing the two is one of the most common and most damaging pricing errors in a small business, because it makes a product look profitable when it is barely breaking even.
What gross profit does and does not tell you
Gross profit is revenue less the direct cost of what you sold. It says nothing about rent, wages, insurance or interest, and a healthy gross margin can still leave a loss once those are paid. Watching it monthly rather than annually is what makes it useful: a margin that drifts down by a couple of points is usually a supplier price rise, a discount that became permanent, or stock going missing — and all three are visible early and invisible at year end.
Frequently asked
What is the difference between margin and mark-up?+
Margin is profit as a percentage of the selling price; mark-up is profit as a percentage of the cost. A 50% mark-up is a 33% margin — the calculator shows both.
What is the difference between margin and mark-up?+
Mark-up is measured against cost, margin against selling price. A 50% mark-up is a 33% margin. Pricing on one while budgeting on the other is a reliable way to lose money on something that looks profitable.
What is a good gross margin?+
It depends entirely on the trade — a food business and a consultancy are not comparable. The more useful question is whether yours is moving, and why. A drift of two points usually means a supplier increase, a discount that stopped being temporary, or stock loss.
Beyond the tools
An estimate is a starting point, not a plan.
Bring us the number you just worked out and we will tell you what it means for your position — and what to do about it.
Or call 07480 281548