Free business tool
Profit Margin Calculator — True Profit Per Unit or Job
Revenue means nothing without margin. A product selling for £50 with a 10% margin earns you less than one selling for £30 with a 40% margin. This calculator shows your gross profit margin, net profit and true profit per unit — with modes for both product-based and service-based businesses.
How to use: Enter your selling price and costs. The calculator will show your gross margin, profit per unit, and how many units you need to sell to reach your target income.
Understanding your results
Gross profit margin is your selling price minus direct costs (cost of goods sold or direct labour), expressed as a percentage of the selling price. A 40% margin on a £100 product means £40 of each sale is gross profit. This must then cover your overheads (rent, salaries, marketing, software) before you arrive at net profit. Healthy gross margins vary enormously by industry — retail typically runs at 25–50%, while professional services can exceed 60–70%.
Frequently asked questions
What is a good profit margin for a small business?
This depends entirely on your industry. A net profit margin of 10–20% is generally considered healthy for most small businesses. Gross margins should be significantly higher — typically 40%+ for service businesses and 25%+ for product businesses. If your gross margin is below 20%, small changes in costs or pricing will have an outsized impact on your profitability.
What is the difference between margin and markup?
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. A product costing £60 sold for £100 has a 40% margin but a 66.7% markup. Confusing the two is one of the most common pricing mistakes in small business — and it directly affects your bottom line.
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