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Gross Profit Calculator

Calculate gross profit from revenue and cost. This page focuses on profit dollars first, with gross margin shown as context for pricing and business decisions.

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Result

Gross profit
$4,200.00

Revenue minus the cost entered.

Gross margin
35%

Gross profit as a percentage of revenue.

How gross profit calculation works

Gross profit is the dollar amount left after subtracting cost from revenue.

The calculator also shows gross margin percentage by dividing gross profit by revenue.

This page is dollar-first. Use the profit margin calculator when the main question is what percentage of revenue remains.

Gross profit formula

Gross Profit = Revenue - Cost; Gross Margin % = (Gross Profit / Revenue) x 100

The cost input controls what kind of gross profit you are measuring. Direct cost gives a gross-profit view; broader cost inputs produce broader profit analysis.

  • Revenue is total sales or income for the period, job, product, or order.
  • Cost is the cost basis subtracted from revenue.
  • Gross Profit is revenue minus cost.
  • Gross Margin % divides gross profit by revenue.

What the Numbers Mean

Revenue
Total sales or income before subtracting the cost entered.
Cost
The cost basis for the calculation, such as product cost, job cost, or direct service delivery cost.
Gross profit
The dollar amount left after subtracting the cost entered from revenue.
Gross margin
Gross profit expressed as a percentage of revenue.

Assumptions

  • Revenue must be greater than zero so margin percentage can be calculated.
  • The calculator uses the cost value you enter and does not classify costs automatically.
  • Taxes, overhead, commissions, shipping, and platform fees are excluded unless included in cost.
  • Negative gross profit is possible when cost is greater than revenue.
  • This is not a full income statement or cash-flow model.

Worked Examples

Product batch

Input
$12,000 revenue, $7,800 cost
Formula
$12,000 - $7,800
Output
$4,200 gross profit, 35% gross margin

The batch keeps $4,200 before any costs not included in the cost input.

Service package

Input
$8,500 revenue, $5,100 cost
Formula
$8,500 - $5,100
Output
$3,400 gross profit, 40% gross margin

A 40% gross margin means 40 cents of each revenue dollar remains after the cost entered.

Wholesale order

Input
$50,000 revenue, $32,000 cost
Formula
$50,000 - $32,000
Output
$18,000 gross profit, 36% gross margin

The gross profit dollar result is often more useful than the percentage when planning cash needs.

Loss on a job

Input
$4,500 revenue, $5,200 cost
Formula
$4,500 - $5,200
Output
-$700 gross profit, -15.56% gross margin

A negative gross profit means the included costs exceeded revenue.

Frequently Asked Questions

How do I calculate gross profit?

Subtract cost from revenue. For example, $12,000 revenue minus $7,800 cost equals $4,200 gross profit.

Is gross profit the same as profit margin?

No. Gross profit is a dollar amount. Profit margin is a percentage of revenue.

What costs should I include?

Include the costs relevant to the gross profit you want to measure, such as cost of goods sold, direct labor, or job delivery cost.

Can gross profit be negative?

Yes. If cost is higher than revenue, gross profit and gross margin are negative.

Does this include overhead?

Only if you include overhead in the cost input. Many gross profit calculations use direct costs and exclude overhead.

When should I use break-even instead?

Use break-even when fixed costs and required sales volume are the main question.

Related Calculators

Continue with the closest next calculation instead of starting from a generic directory.

Gross profit vs profit margin guideDecide whether profit dollars or percentage margin fits the question.Profit margin calculatorFocus on margin percentage instead of profit dollars.Markup calculatorCompare profit to cost instead of revenue.Break-even calculatorEstimate how many units must sell to cover fixed costs.Cost plus pricing calculatorSet a selling price from cost and target markup.Price per unit calculatorConvert total price into a unit price before margin analysis.Commission calculatorEstimate sales payouts that may reduce gross profit.

Disclaimer

This calculator is a simplified gross-profit tool and does not replace accounting, tax, or financial statement advice.