Free tool
Profit calculator: gross, operating and net profit
Convertica's free profit calculator works out how much profit you made, on one sale or on everything you sold in a period. Enter a selling price, a cost and a quantity, then the fees, shipping, ad spend, overheads and tax you want counted. It returns gross, operating and net profit, each as an amount and as a percentage of revenue, in any currency.
Short answer
A profit calculator subtracts costs from revenue: profit = revenue - costs. Convertica's free profit calculator takes a selling price, a cost and the units sold, then your fees, ad spend, overheads and tax, and returns gross, operating and net profit. Selling 1,000 units at 150 that cost 90 each gives 60,000 of gross profit.
- Profit is revenue minus costs. Which profit you get depends on how many costs you have subtracted.
- Gross profit subtracts only the cost of goods sold. Operating profit also subtracts fees, shipping, ad spend and overheads. Net profit subtracts tax as well.
- Profit is an amount. Divide it by revenue for the profit margin, or by cost for the markup.
- Ad spend and overheads do not rise with each sale, so every unit sold past break-even adds its full per unit profit.
- There is no universal good profit: judge yours against your own break-even point and what the business has to pay for.
Profit calculator
Free to use, no sign-up. Any currency. It runs in your browser: nothing you enter is sent anywhere. For one sale, set units sold to 1 and leave ad spend and overheads empty.
Net profit
18,000
Revenue: 150 × 1,000 units = 150,000.
Gross profit: 150,000 - 90,000 cost of goods = 60,000 (40.00% of revenue).
Operating profit: 60,000 - 7,500 other unit costs - 3,000 payment fees (2% of revenue) - 12,000 ad spend - 15,000 overheads = 22,500 (15.00% of revenue).
Net profit: 22,500 - 4,500 tax (20% of 22,500) = 18,000 (12.00% of revenue).
Per unit: 60 gross profit, 49.50 after unit costs and fees, 22.50 after ad spend and overheads.
Break-even: 27,000 of ad spend and overheads ÷ 49.50 left per unit = 545.45 units. Each unit sold beyond that adds 49.50 of operating profit.
| Revenue | 150,000 |
|---|---|
| Gross profit | 60,000 (40.00% of revenue) |
| Operating profit | 22,500 (15.00% of revenue) |
| Net profit | 18,000 (12.00% of revenue) |
Formulas
revenue = selling price * units sold
gross profit = revenue - cost per unit * units sold
operating profit = gross profit - unit costs - payment fees - ad spend - overheads
net profit = operating profit - taxWhat is the profit formula?
The profit formula is revenue minus costs: profit = revenue - costs. For one item that is the selling price minus what the item cost you. For a period it is everything you sold minus everything it cost to sell it. An item that costs 90 and sells for 150 makes 60; sell 1,000 of them and that is 60,000.
profit per unit = selling price - cost per unit
total profit = (selling price - cost per unit) * units sold
gross profit = revenue - cost of goods sold
operating profit = gross profit - operating costs
net profit = operating profit - interest and taxThe formula never changes. What changes is how many costs you have subtracted, which is why one business can report three different profits for the same month: see gross, operating and net profit below. This calculator is for a business that sells products or services. It does not work out the gain on shares, options or crypto.
How to use the profit calculator
- Enter the selling price, the cost and the units sold. That is enough for gross profit. For a single sale, set units sold to 1.
- Add the costs of each sale. Shipping and packaging go in as an amount per unit. Payment or marketplace fees go in as a percentage of the price.
- Add the costs of the period. Ad spend and overheads are totals. They do not change when you sell one more unit.
- Add a tax rate if you want net profit. Leave it empty and the result stops at operating profit.
- Read the result. It shows each level of profit as an amount and as a percentage of revenue, the profit per unit, and how many units it takes to break even.
How to calculate profit: a worked example
To calculate profit, add up the revenue, then subtract the costs in order: the cost of what you sold, the costs of selling it, the costs of running the business, then tax. The numbers below are the default values in the calculator, made up to show the arithmetic. They are not a benchmark.
Profit on one sale
- Selling price: 150. Cost of the item: 90. Gross profit = 150 - 90 = 60.
- Shipping and packaging: 7.50. Payment fee: 2% of 150 = 3.
- Left from the sale = 60 - 7.50 - 3 = 49.50. This is what one sale puts toward advertising, overheads and profit.
Profit for the period
- Revenue = 150 × 1,000 units = 150,000.
- Gross profit = 150,000 - 90,000 cost of goods = 60,000, which is 40% of revenue.
- Operating costs = 7,500 shipping + 3,000 payment fees + 12,000 ad spend + 15,000 overheads = 37,500.
- Operating profit = 60,000 - 37,500 = 22,500, which is 15% of revenue.
- Tax at 20% of operating profit = 4,500. Net profit = 22,500 - 4,500 = 18,000, which is 12% of revenue.
The store took 150,000 and kept 18,000. Stopping at the first figure is the usual mistake: 60,000 of gross profit looks like the answer, but 70% of it was already owed to someone else.
Gross profit vs operating profit vs net profit
Gross profit, operating profit and net profit are the same revenue with more costs subtracted at each step. Gross profit subtracts only the cost of the goods sold. Operating profit also subtracts the costs of selling and of running the business. Net profit subtracts interest and tax as well, and is what the owners keep.
| Profit | Formula | In the example | What it answers |
|---|---|---|---|
| Gross profit | Revenue - cost of goods sold | 150,000 - 90,000 = 60,000 | Do the products earn more than they cost? |
| Operating profit | Gross profit - selling costs, advertising and overheads | 60,000 - 37,500 = 22,500 | Does the business pay its own running costs? |
| Net profit | Operating profit - interest and tax | 22,500 - 4,500 = 18,000 | What is finally left for the owners? |
Each profit divided by revenue is a margin: gross margin, operating margin and net profit margin. The margin calculator works in those percentages and gives the price a target margin needs. This page stays with the amounts.
How to calculate profit for a month, a quarter or a year
To calculate profit for a period, take the revenue for that period and subtract every cost from the same period. If you already have the totals from your accounts or your store's reports, you do not need a price or a quantity: enter the totals below. The example is the same store, entered as totals.
Profit for a period calculator
Use figures for the same period. The table in the result shows where each part of the revenue went.
Net profit
18,000
Gross profit: 150,000 - 90,000 cost of goods sold = 60,000 (40.00% of revenue).
Operating profit: 60,000 - 10,500 fees, shipping and selling costs - 12,000 ad spend - 15,000 overheads = 22,500 (15.00% of revenue).
Net profit: 22,500 - 4,500 tax (20% of 22,500) = 18,000 (12.00% of revenue).
| Cost of goods sold | 90,000 (60.00% of revenue) |
|---|---|
| Fees, shipping and selling costs | 10,500 (7.00% of revenue) |
| Ad spend | 12,000 (8.00% of revenue) |
| Overheads | 15,000 (10.00% of revenue) |
| Operating profit | 22,500 (15.00% of revenue) |
| Tax | 4,500 (3.00% of revenue) |
| Net profit | 18,000 (12.00% of revenue) |
Formulas
gross profit = revenue - cost of goods sold
operating profit = gross profit - selling costs - ad spend - overheads
net profit = operating profit - operating profit * tax rateWhich costs to subtract, and where
A profit figure is only as complete as the list of costs behind it. The table shows where each common cost comes off and whether it grows with every sale. That last column matters: costs that grow with each sale set the profit per unit, and the rest set how many units you need to sell.
| Cost | Comes off before | Grows with each sale? | Field in the calculators |
|---|---|---|---|
| Products, materials and direct labor | Gross profit | Yes | Cost per unit, or cost of goods sold |
| Payment and marketplace fees | Operating profit | Yes | Payment fees, or selling costs |
| Outbound shipping and packaging | Operating profit | Yes | Other costs per unit, or selling costs |
| Refunds and returns | Revenue | Yes | Enter revenue net of refunds |
| Advertising | Operating profit | No: it follows your budget | Ad spend |
| Wages, rent, software, insurance | Operating profit | No | Overheads |
| Interest on loans | Net profit | No | Not separate: add it to overheads to count it |
| Tax on profit | Net profit | It follows the profit | Tax on profit |
Where a cost sits is decided by your own accounts. Payment fees and outbound shipping are part of cost of goods sold in some stores' books and an operating cost in others, which moves gross profit and leaves net profit where it was. Keep one treatment from period to period. For the fee rate itself, the Stripe fee calculator and the PayPal fee calculator work out what a processor keeps from a sale, as an amount and as a percentage of the payment. Paying a commission on each sale? The commission calculator gives the amount, including tiered plans and splits.
The tax line is an estimate. It applies one rate to operating profit and counts no tax on a loss. Your real tax bill follows the rules where the business is registered, so use your accountant's figure when you have one.
How to calculate profit percentage
To calculate profit percentage, divide the profit by revenue and multiply by 100. The result is the profit margin. On an item that costs 90 and sells for 150, the 60 of profit is 40.00% of the price. Divide the same 60 by the cost instead and you have the markup, 66.67%.
| Measure | Formula | On this sale | Use it to |
|---|---|---|---|
| Profit | Selling price - cost | 150 - 90 = 60 | Count what you made |
| Profit margin | Profit / selling price × 100 | 60 / 150 = 40.00% | Compare products or periods of different sizes |
| Markup | Profit / cost × 100 | 60 / 90 = 66.67% | Set a price from a cost |
How many sales does it take to make a profit?
The number of sales it takes to make a profit is your fixed costs divided by what each sale leaves after its own costs. In the example, ad spend and overheads come to 27,000 and each sale leaves 49.50, so break-even is 27,000 / 49.50 = 545.45 units. Sale number 546 is the first one that earns anything.
left per unit = selling price - cost per unit - unit costs - payment fee
break-even units = (ad spend + overheads) / left per unitPast that point the picture changes. The fixed costs are already paid, so every further sale adds its whole 49.50 to operating profit. That is why the store's 1,000 sales average 22.50 of operating profit each, while the next sale would add 49.50.
How does conversion rate change profit?
Conversion rate changes profit faster than it changes sales, because the same visitors and the same ad spend produce more orders. Say the store's 1,000 sales came from 25,000 visitors, a conversion rate of 4.00%. At 5.00%, those visitors would place 1,250 orders, and operating profit would go from 22,500 to 34,875.
| Conversion rate | Units sold | Revenue | Gross profit | Operating profit | Share of revenue | Net profit |
|---|---|---|---|---|---|---|
| 2.00% | 500 | 75,000 | 30,000 | -2,250 | -3.00% | -2,250 |
| 3.00% | 750 | 112,500 | 45,000 | 10,125 | 9.00% | 8,100 |
| 4.00% (the example) | 1,000 | 150,000 | 60,000 | 22,500 | 15.00% | 18,000 |
| 5.00% | 1,250 | 187,500 | 75,000 | 34,875 | 18.60% | 27,900 |
| 6.00% | 1,500 | 225,000 | 90,000 | 47,250 | 21.00% | 37,800 |
Between the 4.00% and 5.00% rows, orders rise by 25% and operating profit by 55%: 250 extra orders at 49.50 each, 12,375 in all. It cuts the other way too. This store breaks even at a conversion rate of 2.18%, and below that it loses money on the same traffic.
This is arithmetic on one made-up store, not a forecast. It holds the price, the costs per unit, the ad spend and the overheads still, and a real change rarely leaves all four alone. What it shows is where to look: when fixed costs are a large part of the total, the conversion rate of the pages your traffic lands on decides a large part of the profit.
Find your current rate with the conversion rate calculator, and the return your ads need with the break-even ROAS calculator. The ROI calculator turns a profit into a return on what was spent to earn it. To find what is holding your conversion rate down, Convertica's free CRO audit checks the page your visitors land on and ranks the fixes by likely impact.
How to calculate profit in Excel or Google Sheets
To calculate profit in Excel or Google Sheets, put the selling price in A2, the cost per unit in B2 and the units sold in C2, then enter =(A2-B2)*C2 for gross profit. The same formulas work in both programs. In the table, D2 holds your other costs for the period and F2 a tax rate formatted as a percentage.
| To get | Formula | Note |
|---|---|---|
| Revenue | =A2*C2 | 150 and 1,000 return 150,000 |
| Gross profit | =(A2-B2)*C2 | With 90 in B2, returns 60,000 |
| Operating profit | =(A2-B2)*C2-D2 | With 37,500 in D2, returns 22,500. Put this one in E2 |
| Tax | =MAX(0,E2*F2) | No tax on a loss. 20% in F2 returns 4,500 |
| Net profit | =E2-MAX(0,E2*F2) | Returns 18,000 |
| Profit as a percentage of revenue | =IF(A2*C2=0,"",E2/(A2*C2)) | Format the cell as a percentage. Empty when there is no revenue |
| Gross profit across many products | =SUMPRODUCT(A2:A100-B2:B100,C2:C100) | One product per row: price, cost and units |
For a product list, add up the profit row by row, as in the last formula. Multiplying an average price by total units gives a different answer whenever the products sell in different quantities.
What is a good profit?
A good profit is one that pays for everything the business needs and leaves the amount you set out to keep. There is no universal good figure, which is why this page publishes no averages by industry: a number averaged across businesses with different costs, prices and accounting says nothing about what yours has to earn.
Your own break-even does. The store in the example breaks even at 545.45 units, so 1,000 units is a comfortable month, and one with 600 would leave only 2,700 of operating profit. Work out the same line for your business, then judge each month against it.
What a profit figure leaves out
- Cash. Profit counts a sale when it is made and a cost when it is used. Stock you have paid for and not yet sold, and invoices customers have not yet paid, change the bank balance without changing profit.
- The money tied up to earn it. The same profit is a better result on a small investment than on a large one. That comparison is a return, not a profit.
- Repeat purchases. A first sale that barely breaks even can still be worth winning if the customer buys again.
Related calculators
Profit is an amount. These calculators turn it into the ratios you manage a business by, and the guide to ecommerce metrics shows where each one sits among the numbers a store tracks.
See all free tools and how they fit together.
Profit calculator FAQ
How does the profit calculator work?
The profit calculator multiplies the selling price by the units sold to get revenue, then subtracts costs in three steps: cost of goods for gross profit, fees, shipping, ad spend and overheads for operating profit, and tax for net profit. With 1,000 units at 150 that cost 90 each, it returns 60,000 gross, 22,500 operating and 18,000 net profit in this page's example.
What is the profit formula?
Profit = revenue - costs. For one item it is selling price - cost: 150 - 90 = 60. For a quantity it is (selling price - cost) × units sold: 60 × 1,000 = 60,000. Subtract only the cost of goods and the result is gross profit; subtract every cost and it is net profit.
How do you calculate gross profit?
Gross profit = revenue - cost of goods sold. Add up the sales for the period, add up what those goods cost to buy or make, and subtract. Revenue of 150,000 with 90,000 of cost of goods sold leaves 60,000 of gross profit. Wages, rent, advertising and tax are not part of it.
What is the difference between gross profit and net profit?
Gross profit is revenue minus the cost of the goods sold. Net profit is what is left after every other cost has also been paid: fees, shipping, advertising, overheads, interest and tax. In this page's example, 150,000 of revenue leaves 60,000 of gross profit and 18,000 of net profit.
What is operating profit?
Operating profit is gross profit minus the costs of running the business: selling costs, advertising, wages, rent and software. It is profit before interest and tax. In this page's example, 60,000 of gross profit minus 37,500 of operating costs leaves 22,500 of operating profit, which is 15.00% of revenue.
How do I calculate profit percentage?
Divide the profit by revenue and multiply by 100. That figure is the profit margin: 60,000 of gross profit on 150,000 of revenue is 40%. Dividing the same profit by the cost instead gives the markup, 66.67% here. Say which one you mean, because the two are easy to mix up.
How do I calculate profit per unit?
Subtract everything one unit costs you from its selling price. A unit that sells for 150 and costs 90 makes 60 of gross profit. Take off 7.50 of shipping and a 2% payment fee (3) and 49.50 is left to pay for advertising and overheads.
What is a 20% profit on 100?
It depends on what the 20% is measured against. As a markup on a cost of 100, the price is 120 and the profit 20. As a margin, with profit at 20% of the selling price, the price is 100 / 0.8 = 125 and the profit 25. If 100 is the selling price, 20% of it is 20.
How many units do I need to sell to break even?
Divide the costs that do not change with sales by the profit left on each unit. In this page's example, ad spend and overheads come to 27,000 and each unit leaves 49.50 after its own costs, so break-even is 27,000 / 49.50 = 545.45 units.
Is profit the same as cash flow?
No. Profit is revenue minus the costs of earning it over a period. Cash flow is the money that actually moved in and out of the bank in that period. Stock you bought but have not sold, invoices not yet paid and loan repayments all change cash without changing profit in the same way.
What is a good profit?
A good profit is one that pays for everything the business needs and leaves what you want to keep. There is no universal figure, because costs differ from one business to the next. Start from your own break-even point: in this page's example the store needs 545.45 units before it earns anything.
How do I calculate profit in Excel or Google Sheets?
Put the selling price in A2, the cost per unit in B2 and the units sold in C2, then enter =(A2-B2)*C2 for gross profit. With your other costs for the period in D2, =(A2-B2)*C2-D2 gives operating profit. For profit as a percentage of revenue, use =IF(A2*C2=0,"",E2/(A2*C2)) with the profit in E2.