Profit margin calculator. What you keep of every dollar. Gross margin says whether the work is priced right; net margin says whether the business is.
direct costsoverheadsprofit
Australian figures, checked 19 September 2026. Nothing you type leaves your browser.
Where the dollar goes.
A dollar comes in. Some of it paid for the materials and the labour on that job: that's the direct cost, and what's left is gross profit. Then the rent, the van, the insurance, the software and the bookkeeper take their share, whether or not that job happened: those are the overheads, and what's left after them is net profit. Margin is just that number as a share of the dollar.
Gross margin is the one to watch job by job. If it moves, a price or a supplier moved. Net margin is the one to watch month by month. If gross holds and net slides, the overheads are growing faster than the work. If the owner isn't paying themselves a proper wage inside the overheads, net margin is a story, not a number.
What healthy looks like.
Trades
Gross 40 to 60% with labour in the direct costs; net 10 to 20%. The charge-out rate is what sets it.
Services and consulting
Gross 60 to 80%. Net depends on how many people aren't billable, which is usually the owner.
Cafes and hospitality
Gross 60 to 70% on food and drink; net 3 to 10%. Volume and wages decide it.
Retail
Gross 30 to 50%; net 2 to 8%. Stock that doesn't move is the margin walking out the door.
Below 5% net
A quiet month is a loss. Either the price, the overheads or the hours have to move.
Before GST
GST isn't revenue or cost. Use ex-GST figures, or the GST calculator to strip it.
The margin you're not measuring.
Most small businesses lose margin to hours nobody bills: quoting, chasing invoices, answering the phone, retyping the same details into three systems. Those hours are an overhead that never shows up as one. A map of where the hours go is what we do first, and the ROI calculator will show you what getting them back is worth.
Questions people ask.
How do I calculate profit margin?
Revenue minus costs, divided by revenue, times 100. $10,000 of sales with $6,000 of direct costs is $4,000 of gross profit, a 40% gross margin. Take the overheads out too and you have the net margin.
What's the difference between gross and net profit margin?
Gross margin takes out only the direct cost of the sales: materials, subcontractors, labour on the job. Net margin also takes out the overheads: rent, insurance, vehicles, software, admin, the accountant. Gross tells you whether the work is priced right. Net tells you whether the business is.
What's a good profit margin for a small business in Australia?
It depends on the trade. Net margins of 10 to 20% are healthy for most service businesses; trades often run 15 to 25% gross on materials and much higher on labour; cafes and retail live on thin net margins and volume. Below 5% net, a slow month is a loss. Compare against your own last year before anyone else's.
Is profit margin the same as markup?
No. Margin is profit over price; markup is profit over cost. A 40% margin is a 66.7% markup. The markup calculator on this site converts between them.
Should I use GST-inclusive or exclusive figures?
Exclusive. GST isn't your revenue and it isn't your cost; it passes through you to the ATO. Use the figures without it, which is how your accounting software reports them.
Does the owner's wage count as a cost?
It should. If you're not paying yourself a market wage and counting it in overheads, the net margin flatters the business. Put in what you'd have to pay someone to do your job, and see what's really left.
Photo to come: Cal.
Calum Buchanan.
Melbourne. Ran the systems behind a services business, the phones, the invoices, the marketing, the reporting, and spent the last few years handing them to AI that works. This is that, for yours.