Profit margin calculator
Enter your revenue and costs for a month (or a year) to get gross margin, net margin and markup instantly.
Results
Profit margin formulas
- Gross profit = revenue − cost of goods sold
- Gross margin = gross profit ÷ revenue × 100
- Net profit = gross profit − operating expenses
- Net profit margin = net profit ÷ revenue × 100
- Markup = net profit ÷ total costs × 100
What goes where for a SaaS
| Cost of goods sold | Operating expenses |
|---|---|
| Hosting, database, CDN | Marketing and ads |
| Per-use APIs (AI models, SMS, email sending) | Tools (analytics, CRM, design) |
| Payment fees, app store commissions | Contractors, salaries |
| Customer support directly tied to delivery | Legal, accounting, domains |
Example
A SaaS makes $10,000 a month. Hosting, APIs and Stripe fees cost $1,500, and tools, ads and a part-time contractor $3,000. Gross margin is 85%, net margin 55%, and the business keeps $5,500 a month.
Margins of SaaS for sale
Among the 896 verified-revenue listings on TrustMRR we score, the median stated profit margin is 85% (middle half: 70%–95%). Margins are self-reported by sellers, so buyers recompute them from invoices during due diligence: see our SaaS due diligence checklist. Margin also drives what a business is worth: try the payback calculator or the valuation calculator.
Frequently asked questions
How do you calculate profit margin?
Profit margin = profit ÷ revenue × 100. Gross margin uses revenue minus the direct cost of delivering the product; net margin subtracts every expense. $10,000 of revenue and $4,500 of total costs give a 55% net profit margin.
What is the difference between margin and markup?
Margin divides profit by revenue; markup divides profit by costs. The same $5,500 profit on $10,000 of revenue and $4,500 of costs is a 55% margin but a 122% markup.
What is a good profit margin for a SaaS?
Software usually has 70-90% gross margins. On TrustMRR, the median small SaaS for sale claims an 85% profit margin, with the middle half between 70% and 95%. AI products paying per API call often land much lower.
Should payment fees count in gross margin?
Yes. Payment processing (Stripe fees, app store commissions of 15-30%), hosting and per-use APIs are direct costs of delivering the product and belong in cost of goods sold.