Profit Calculator

How the profit calculator works

This profit calculator turns four numbers into a full picture of a product or small business: how many units you sell, the price, what each unit costs you, and your fixed costs. Profit is simply revenue minus total costs, but the useful part is what comes with it: profit margin, markup, profit after tax and the break-even point.

The formulas

• Revenue = units × price per unit.
• Total costs = units × cost per unit + fixed costs.
• Profit = revenue − total costs.
• Profit margin = profit ÷ revenue × 100. Gross margin uses only unit costs: (revenue − unit costs) ÷ revenue.
• Markup = profit ÷ total costs × 100.
• Break-even units = fixed costs ÷ (price − cost per unit), rounded up to a whole unit.

Worked example

You sell 500 units at $25. Each costs $12 to make and ship, and fixed costs are $3,000. Revenue is $12,500 and unit costs are $6,000, so gross profit is $6,500 (a 52% gross margin). After the $3,000 of fixed costs, profit is $3,500, a 28% profit margin. Each unit contributes $13 toward fixed costs, so you break even at $3,000 ÷ $13 = 230.77, rounded up to 231 units, or $5,775 of revenue.

Margin versus markup

Margin divides profit by revenue, markup by cost, so for the same sale markup is always the larger number. A 28% margin is a 38.9% markup on total costs in the example above. If you only need to price from a cost and a target, the markup calculator does that directly.

When the result misleads

Break-even assumes the price and unit cost stay constant as volume grows, which discounts and bulk pricing break. Fixed costs are fixed only within a range of output. The tax field applies a flat rate to positive profit and ignores deductions, so treat it as a rough estimate. The U.S. Small Business Administration offers guidance on projecting costs and break-even for a business plan.