Yusuf Bayrak
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    Net Profit Margin Calculator

    Net profit margin shows what share of revenue you keep after every cost — COGS, operating expenses, interest and tax. Enter total revenue and total expenses to see the result as a percentage and an amount.

    //Calculator
    // Net Profit Margin
    0.00%
    Net Profit Margin = ((Revenue − Total Expenses) / Revenue) × 100
    // Net Profit
    $0.00

    // Total expenses should include COGS, payroll, rent, marketing, software, interest and tax. Reference: retail 2-10%, services 10-20%, mature SaaS 15-25%.

    //Guide

    How is net profit margin calculated?

    The formula: Net Profit Margin = ((Revenue − Total Expenses) / Revenue) × 100. Unlike gross margin, total expenses cover the entire cost base: COGS, payroll, rent, software subscriptions, marketing and advertising, accounting and consulting, depreciation, loan interest and taxes.

    Net margin is the ultimate efficiency read on a business. A high gross margin paired with a thin net margin says the problem is not production or sourcing but the cost structure — usually bloated marketing spend, an inefficient team shape or financing costs. Reading both margins side by side is far more informative than either alone.

    Reading the margin carefully

    Net margin swings with timing: one-off investments, tax schedules or FX effects can distort a single quarter. Track a 3-12 month rolling average rather than a single month, and where possible strip out one-off items to compute a normalised margin as well.

    //Frequently Asked Questions

    What is net profit margin?

    Net profit margin is net profit as a share of revenue after all expenses: ((Revenue − Total Expenses) / Revenue) × 100. It shows how much of every 100 units of revenue the business actually keeps.

    What is a good net profit margin?

    It varies by sector. As guidance, 2-10% is common in retail and e-commerce, 10-20% in services and 15-25% in mature SaaS. Growth-stage companies may run negative net margin deliberately; what matters is the direction of travel and the cash runway.

    Why is net profit margin lower than gross profit margin?

    Because gross margin subtracts only COGS, while net margin also removes marketing, payroll, rent, software, interest and tax. The gap between the two measures your operating cost load.

    What should be included in total expenses?

    Everything: COGS plus payroll and benefits, rent and utilities, software subscriptions, marketing and ad spend, consulting and accounting, depreciation, loan interest and taxes. If you want to isolate direct product cost, use the Gross Profit Margin Calculator.

    //Related

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    Source: Investopedia — Net Profit Margin