Gross margin, net margin, markup & break-even — free tool
Enter your revenue and cost — we'll calculate margin and markup.
Direct costs: materials, labour, contractor fees, etc.
Rent, salaries, subscriptions — used to calculate net margin.
Formulas used
Gross margin % = (Revenue − COGS) ÷ Revenue × 100
Net margin % = (Gross profit − Overheads) ÷ Revenue × 100
Markup % = (Revenue − COGS) ÷ COGS × 100
Break-even = Fixed costs ÷ Gross margin %
What is profit margin?
Profit margin is the percentage of revenue that remains after subtracting costs. Gross margin = (Revenue − COGS) ÷ Revenue × 100. Net margin = (Revenue − All costs) ÷ Revenue × 100.
What is the difference between margin and markup?
Margin is profit as a percentage of selling price. Markup is profit as a percentage of cost. A 50% markup equals a 33% margin. Confusing the two leads to underpricing.
What is a good profit margin for a freelancer or agency?
Service businesses typically target 20–40% net profit margin. Below 15% leaves little buffer for slow months. Above 50% is achievable for high-skill niches and productised services.
How do I calculate my break-even point?
Break-even = Fixed costs ÷ Gross margin %. For example, if fixed costs are $3,000/month and your gross margin is 60%, you need to generate $5,000 in revenue to break even.
How do I set the right price for my service?
Start with your costs (time + direct expenses), add your target net margin, then sanity-check against market rates. Use the markup field to work backwards from cost to price.
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