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Free Business Tool

Profit Margin Calculator

Calculate your gross profit margin, operating profit margin, and understand the profitability of your business at a glance.

Updated April 2026🇬🇧 UK-specificFree Tool

About This Profit Margin Calculator

This calculator helps UK businesses calculate gross profit margin, net profit margin, and markup percentage. Enter your revenue and costs to instantly see your profitability metrics and compare against industry benchmarks.

Note: Gross margin measures profitability before overheads. Net margin reflects overall business profitability after all costs. A healthy net margin varies significantly by industry.

How to Use This Calculator

  1. 1Enter your total revenue (sales) for the period.
  2. 2Enter your cost of goods sold (COGS) to calculate gross margin.
  3. 3Enter operating expenses to calculate net profit margin.
  4. 4Compare your margins against typical UK industry benchmarks.

Business Financials

£100,000
£0£1,000,000
£40,000
£0£500,000
£20,000
£0£500,000

Gross margin = (Revenue − COGS) / Revenue. Operating margin also deducts operating expenses. A healthy gross margin varies by industry: retail is typically 20–40%, software 60–80%.

🗓Last updated: April 2026 — based on 2026/27 HMRC rates
Gross Profit Margin
60.00%
£60,000 gross profit
Operating Profit Margin
40.00%
£40,000 operating profit
Gross Profit
£60,000
Revenue minus COGS
Operating Profit
£40,000
After all operating costs

Revenue Breakdown

Gross Profit£60,000 (60.0%)
Cost of Goods Sold£40,000 (40.0%)
Operating Expenses£20,000 (20.0%)

Financial Overview

RevenueGross ProfitOperating ProfitCOGSOpEx£0k£25k£50k£75k£100k
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Gross vs Operating Margin

Gross margin measures profitability after direct production costs (COGS). Operating margin also deducts indirect costs like rent, salaries, and marketing. Both are key indicators of business health.

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Industry Benchmarks

Profit margins vary widely by sector. Retail typically achieves 2–5% net margin, while SaaS businesses can exceed 20%. Comparing your margins to industry benchmarks helps identify areas for improvement.

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Improving Your Margins

You can improve margins by increasing prices, reducing COGS through better supplier negotiations, cutting operating expenses, or shifting your product mix towards higher-margin offerings.