Gross Profit Calculator
Work out gross profit and gross margin from revenue and cost of goods sold for your Australian business.
Your results
Calculation breakdown
- Gross profit
- Revenue − COGS
- Gross margin
- (Gross profit ÷ Revenue) × 100
Worked example
A Sydney homewares retailer with $200,000 revenue and $120,000 in cost of goods sold has a gross profit of $80,000, a 40% gross margin.
Assumptions
- COGS should only include direct production or purchase costs, not overheads.
- Figures should be for the same period, e.g. both for one financial year.
- This is a general business calculation, not tax or accounting advice.
How this calculator works
This calculator subtracts your cost of goods sold from revenue to show gross profit in dollars and as a percentage margin. Enter your sales revenue and direct costs to see how much is left before overheads.
Gross profit and gross margin formulas
Gross profit is sales revenue minus the direct cost of the goods or services sold. Gross margin expresses that profit as a percentage of revenue, which makes different periods or products easier to compare.
For example, $200,000 revenue minus $120,000 cost of goods sold gives $80,000 gross profit. Dividing $80,000 by $200,000 gives a 40% gross margin.
- Gross profit = revenue − cost of goods sold
- Gross margin = gross profit ÷ revenue × 100
- Use figures from the same reporting period
What to include in cost of goods sold
Cost of goods sold generally covers direct costs such as stock purchases, materials, inward freight and direct production labour. Operating expenses such as rent, marketing, insurance and administration are normally excluded from this gross-profit calculation.
Gross profit is not net profit. Net profit is calculated only after operating expenses, interest and tax are also deducted. Accounting treatment can vary, so use figures prepared consistently with your records.
Official sources and assumptions
Check the underlying Australian Government guidance used to review this calculator's rates and assumptions.
Frequently asked questions
What counts as cost of goods sold?
COGS is the direct cost of producing what you sell, such as materials, stock purchases and direct labour, but not rent, marketing or admin costs.
Is gross profit the same as net profit?
No. Gross profit is revenue minus COGS only. Net profit also subtracts operating expenses, interest and tax.
What is a healthy gross margin?
It varies widely by industry — retail often runs 20–40%, while services can be much higher. Compare against your own sector benchmarks.
Editorial review and responsibility
Reviewed by the CalcAussie editorial team on 21 September 2026. Review scope: Method, Australian terminology, material assumptions, source links and user-facing limitations.
Calculator results remain estimates based on the figures entered. Check material decisions against current official information and report a suspected error so it can be reproduced and corrected.
Results are estimates only and are not financial, tax, legal or credit advice.