Profit Margin Calculator — Gross Margin & Markup | DoUrWork
Calculate gross profit margin, net profit margin, and profit percentage from cost of goods sold (COGS) and selling price. Free on-device tool.
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How to Use the Profit Margin
Enter Cost of Goods Sold (COGS)
Input direct labor, materials, and subcontractor expenses required to deliver the service.
Input Revenue / Selling Price
Enter your proposed client price or contract fee.
Analyze Gross & Net Margins
Review gross profit dollars, gross margin percentage, and markup multiplier.
Frequently Asked Questions
What is the formula for gross profit margin?
Gross Profit Margin = ((Revenue - Cost of Goods Sold) / Revenue) × 100. For example, if you sell a service for $1,000 that costs $600 to deliver, your gross margin is (($1,000 - $600) / $1,000) × 100 = 40%.
What is considered a healthy profit margin for service businesses?
Consulting, digital agencies, and freelance service businesses typically aim for a gross profit margin between 45% and 65%, and a net profit margin (after all operating overhead and taxes) of 20% to 30%.