Ecommerce & profit
Net Profit Margin Calculator
Calculate net profit as a share of revenue after deducting the full cost total you supply.
Use this for a bottom-line margin with all expenses included. Use contribution margin when you want to subtract only variable costs.
What the result means
This percentage is the share of revenue left after all supplied costs. A negative margin indicates a loss. It is a net margin only if the cost total really includes every expense in the chosen accounting scope.
The formula
((Net revenue - all costs and expenses) / net revenue) * 100
Results are displayed to at most two decimal places. Calculations use the unrounded inputs.
A worked example
Put the formula to work
- Net revenue (currency)
- 50,000
- All costs and expenses (currency)
- 42,500
Net profit margin: 15%
Revenue of 50,000 less all costs of 42,500 leaves 7,500 net profit, a 15% net margin.
How to use this calculator
- Select an accounting period and establish net revenue.
- Combine all expenses for that period into one complete cost total.
- Subtract the entire cost total to find net profit.
- Divide net profit by revenue and express it as a percentage.
Why this number matters
Net margin checks whether sales ultimately fund the whole business, including overhead that product-level contribution measures leave out.
Input definitions
- Net revenue (currency)
- Revenue after discounts and returns for the reporting period, excluding pass-through sales tax; must be greater than zero.
- All costs and expenses (currency)
- Sum COGS, shipping, fees, marketing, payroll, rent, other operating expenses, interest, and income tax as applicable. Every supplied cost is deducted in full.
Assumptions and limitations
- Omitted expenses overstate margin; the calculator cannot audit the cost total.
- Accrual profit differs from cash flow because of timing, inventory, and non-cash charges.
- Zero revenue has no defined profit margin even if costs are also zero.
Methodology
The default result and worked example use the same calculation functions as the interactive tool. The formula cannot verify the quality or scope of your source data.
Read our calculation methodology
Last updated .