Calculate gross, operating and net profit margins for your business
Profit margin measures how much of each dollar of revenue a business keeps as profit. A 20% net profit margin means keeping $0.20 of every dollar earned. Average net profit margins by industry: restaurants 3-9%, retail 2-5%, software 20-30%, consulting 15-25%, healthcare 3-7%.
Profit margin is calculated by dividing profit by revenue and multiplying by 100. Gross margin subtracts only cost of goods sold. Operating margin also subtracts operating expenses. Net margin subtracts all expenses including taxes and interest. This calculator shows all three margin types for any revenue and cost inputs.
What price do you need to hit your target net margin?
| Industry | Gross | Operating | Net |
|---|---|---|---|
| Software / SaaS | 70–80% | 20–35% | 15–30% |
| Retail | 20–50% | 3–8% | 2–6% |
| Restaurant | 60–65% | 3–9% | 3–9% |
| Manufacturing | 20–40% | 5–15% | 4–10% |
| Consulting | 40–70% | 15–30% | 10–25% |
| E-commerce | 20–45% | 2–10% | 1–8% |
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For educational purposes only. Benchmarks are approximate industry averages and vary by company size, geography and business model.