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Gross Profit Calculator

See how much your sales earn before overhead. Enter revenue and cost of goods sold, add units if you like, then press Calculate to get gross profit, margin and markup.

Written by TopicDrill Editorial Team·Updated June 2026

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Your inputs

Enter your sales figures, then press Calculate.

$
$

Add units to see per-unit revenue, cost and profit.

Gross profit

$42,000

35.0% gross margin

Revenue$120,000
Cost of goods sold$78,000
Gross profit$42,000

Gross margin

35.0%

Profit per dollar of sales

Markup on cost

53.8%

Profit per dollar of cost

Profit per unit

$11

$30 price - $20 cost

Revenue, cost and profit

$0$30.0k$60.0k$90.0k$120.0k$120.0kRevenue$78.0kCOGS$42.0kGross profit

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How the gross profit calculator works

The tool starts with your total revenue and subtracts the cost of goods sold, the direct cost of making or buying the products you sold. What remains is gross profit, the cash that is available to cover everything else the business spends money on.

From those two numbers it also derives two ratios that matter when you compare products or periods. Gross margin expresses profit as a percentage of revenue, and markup expresses the same profit as a percentage of cost. Add a units figure and you also get the price, cost and profit baked into a single sale.

A quick example

Suppose a shop sells 4,000 items for 120,000 dollars and the goods cost 78,000 dollars to produce. Gross profit is 42,000 dollars, the gross margin is 35 percent, and the markup on cost is about 54 percent. On a per-unit basis each item sells for 30 dollars, costs 19.50 dollars and leaves 10.50 dollars of gross profit.

Things to keep in mind

Gross profit ignores fixed costs such as rent, salaries and advertising, so a healthy gross margin does not guarantee the business is profitable overall. For how the term fits into a full income statement, see this overview from Investopedia. To carry the figure all the way down to take-home profit, try our net profit margin calculator.

Frequently asked questions

What is gross profit?

Gross profit is the money left from sales after subtracting the direct cost of producing or buying what you sold. It is revenue minus cost of goods sold, and it shows how much each sale contributes before overhead, marketing, taxes and other operating expenses are paid.

How do I calculate gross margin from gross profit?

Divide gross profit by revenue and multiply by 100. If a business earns 42,000 dollars of gross profit on 120,000 dollars of revenue, the gross margin is 42,000 divided by 120,000 times 100, which is 35 percent.

What is the difference between margin and markup?

Margin measures profit as a share of the selling price, while markup measures the same profit as a share of the cost. A product that costs 78 dollars and sells for 120 dollars has a 35 percent margin but a roughly 54 percent markup, so the two numbers are never the same.

Does gross profit include operating expenses?

No. Gross profit only subtracts the direct cost of goods sold, such as materials, freight and direct labor. Rent, salaries, advertising and interest come out later to reach operating profit and then net profit, so gross profit is always the larger figure.

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