Gross Margin Percentage Calculator

About this calculator

Gross margin percentage is (revenue − COGS) / revenue × 100 — the share of sales revenue left after paying only for the direct costs of producing what was sold (materials, direct labor, manufacturing overhead), before operating expenses like rent, marketing, or salaries are even considered.

Retailers and manufacturers use it product-by-product to see which items are actually worth stocking or promoting, and investors compare it across companies in the same industry as a proxy for pricing power and production efficiency — a software company might run 70-80% gross margins while a grocery retailer runs 20-25%, so the number is only meaningful next to industry peers.