Business calculator

Free Operating Margin Calculator

Calculate operating profit and operating margin after COGS and operating expenses.

Free to useBrowser-based calculationNo account requiredResults update instantly

Operating Margin Calculator

Operating margin is a planning calculation and is not tax or accounting advice.

Understand the result

Calculate operating profit after operating expenses

Operating margin shows operating profit as a percentage of revenue after subtracting COGS and operating expenses. It helps separate direct costs from the overhead of running the business.

Focused formula

The result uses only the inputs relevant to this business question.

Private in your browser

Values are calculated locally and are not stored or sent anywhere.

Use the calculator

Enter the figures you already have

  1. 1

    Add your inputs

    Use the labels and period shown in the form.

  2. 2

    Review the math

    Results update as your assumptions change.

  3. 3

    Apply the result

    Use it as a planning reference for the next decision.

Gross profit versus operating profit

Gross profit subtracts COGS. Operating profit goes one step further and subtracts operating expenses.

What it excludes

This planning calculation does not attempt to model interest, taxes, extraordinary items, or accounting policy choices.

Worked example

$100,000 revenue minus $55,000 COGS gives $45,000 gross profit; less $25,000 operating expenses gives $20,000 operating profit and a 20% operating margin.

Frequently asked questions

Practical questions people ask about this tool

What are operating expenses?

They are business-running costs such as administration, rent, marketing, and other overhead not included in COGS.

What if revenue is zero?

Operating profit can be calculated from the entered costs, but operating margin is marked unavailable.

Is this tax advice?

No. It is a mathematical planning calculation, not tax or accounting advice.

Can operating margin be negative?

Yes. A negative result means operating expenses and COGS exceed revenue for the entered period.

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