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Free profit margin calculator
Enter your revenue, cost of goods, and operating expenses. Get your gross and net profit margins instantly — with a plain-language explanation of what the numbers mean for your business.
Raw materials, inventory, direct labor — costs tied directly to sales
Rent, utilities, salaries, marketing — overhead costs not tied to a specific sale
Gross Profit
—
— gross margin
Revenue − Cost of Goods Sold
Net Profit
—
— net margin
Gross Profit − Operating Expenses
Profit margin benchmarks for Philippine small businesses
| Business type | Typical net margin |
|---|---|
| Food & restaurant | 5–15% |
| Laundry shop | 10–25% |
| Retail store | 5–10% |
| Freelance / services | 20–40% |
| Rental business | 15–35% |
| Café & coffee shop | 6–15% |
Benchmarks are approximate and vary by location, scale, and pricing strategy. Use them as a reference — not a target.
Common questions
Profit margin FAQs
What is a good profit margin for a small business in the Philippines?
For most Philippine small businesses, a net profit margin of 10–20% is considered healthy. Food businesses typically run 5–15%, retail 5–10%, and service businesses 15–30%. If your net margin is below 5%, review your largest expense categories first — rent, staff costs, and supplies are usually the top drivers.
What is the difference between gross margin and net margin?
Gross margin is revenue minus the direct cost of producing your goods or services (materials, packaging, direct labor). Net margin is gross profit minus all other operating expenses (rent, utilities, salaries, marketing). Net margin shows your true take-home profit as a percentage of revenue.
What should I include in Cost of Goods Sold?
Include only costs directly tied to producing a sale: raw materials, packaging, ingredients, freelancer payments per project, and direct manufacturing labor. Do not include rent, utilities, or salaries for staff who are not directly involved in production — those go in operating expenses.
How can I track my actual profit margins over time?
This calculator gives you a one-time snapshot. To track margins over time, Pipable's AI bookkeeping logs every income and expense transaction, calculates your monthly profit automatically, and sends you a weekly business summary. It's free and works for any small business type.
Is this profit margin calculator free?
Yes, fully free — no account, no credit card. Enter your revenue, costs, and expenses and the results appear instantly. For ongoing profit tracking, Pipable's bookkeeping app is also free for all business types.
Track your actual margins every week — free
This calculator gives you a snapshot. Pipable tracks your real income and expenses automatically, calculates your margin each month, and sends you a weekly AI business summary — so you always know where you stand.
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