Net Profit Margin Calculator

Divide net profit by revenue to get the margin that survives every cost, tax and interest charge.

About Net Profit Margin Calculator

Margin divides profit by revenue; markup divides the same profit by cost. They are routinely confused, so both are shown — a 50% margin is a 100% markup. Margin is what funds every fixed cost in a business business, and mispricing by a few points is the difference between scaling profitably and scaling losses.

Formula

Net Profit Margin

Margin % = (Total revenue − Total costs including tax and interest) ÷ Total revenue × 100

Total revenue: Money received
Total costs including tax and interest: Direct cost of delivering it

Worked example

With the default values below, Net Profit Margin Calculator returns Net Profit Margin of 12.00%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Total revenueminimum 0: 500,000
Total costs including tax and interestminimum 0: 440,000

Results

Net Profit Margin: 12.00%
Profit: $60,000.00
Markup on Cost: 13.64%
Cost as Share of Revenue: 88.00%

Step by step

1Values used
2Net Profit Margin
3Net Profit Margin= 12.00
4Profit= 60,000.00
5Markup on Cost= 13.64
6Cost as Share of Revenue= 88.00

Assumptions and limits

The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Net Profit Margin calculated?

Margin % = (Total revenue − Total costs including tax and interest) ÷ Total revenue × 100 Margin divides profit by revenue; markup divides the same profit by cost. They are routinely confused, so both are shown — a 50% margin is a 100% markup.

Why does Net Profit Margin matter?

Margin is what funds every fixed cost in a business business, and mispricing by a few points is the difference between scaling profitably and scaling losses.

What values do I need to enter?

This calculator takes 2 inputs: Total revenue, Total costs including tax and interest. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.