Net Profit Calculator — Calculate net profit after direct costs, operating expenses, interest, other items and tax. Review gross profit, operating profit, pre-tax profit, net margin and profit per unit in one breakdown.
Enter income and expenses
Profit calculation sequence
| Stage | Formula |
|---|---|
| Gross profit | Revenue − COGS |
| Operating profit | Gross profit − operating expenses |
| Pre-tax profit | Operating profit + other income − interest − other expenses |
| Net profit | Pre-tax profit − estimated income tax |
Net profit margin = Net profit ÷ Revenue × 100
The tax calculation applies the entered rate only to positive pre-tax profit. Actual taxable income can differ because of deductions, credits, depreciation rules, loss carryforwards and local law.
Worked example
Revenue of $100,000 minus $55,000 COGS produces $45,000 gross profit. After $22,000 operating expenses, operating profit is $23,000. Adding $1,000 other income and subtracting $2,000 interest produces $22,000 pre-tax profit. At a simplified 20% tax rate, estimated tax is $4,400 and net profit is $17,600, or a 17.6% net margin.
Understanding net profit
Net profit is the amount remaining after the expenses included in the calculation. It is sometimes called net income or the bottom line. Compare the result over consistent accounting periods and use the same expense classifications each time.
Common mistakes
- Entering sales tax collected from customers as business revenue.
- Leaving owner compensation or non-cash expenses out unintentionally.
- Mixing monthly revenue with annual expenses.
- Treating accounting net profit as identical to cash flow.
Frequently asked questions
Is net profit the same as cash flow?
No. Net profit follows accounting recognition rules, while cash flow tracks cash entering and leaving the business.
What if pre-tax profit is negative?
The calculator shows a loss and applies no positive income-tax estimate. Tax treatment of losses depends on local regulations.
What is a good net margin?
It varies substantially by industry, business model, scale and growth stage. Compare with similar businesses and your own history.
Should depreciation be included?
If depreciation is part of your operating expenses, include it there. Keep classifications consistent when comparing periods.
How to use this Net Profit Calculator
Enter revenue, direct costs, operating expenses, interest, other income, other expenses and an estimated tax rate. Click Calculate net profit to reveal the report. Download the results as a PDF or Excel-compatible file, or select Reset to restore the example.
Net Profit Calculator business guide
A Net Profit Calculator helps owners and managers follow the full path from sales to the bottom line. Run the Net Profit Calculator for consistent monthly, quarterly or annual periods. Keep revenue and expenses on the same basis, classify costs consistently and separate unusual items when comparing performance.
Compare net profit dollars with net profit margin. Dollars show the amount retained after included costs, while margin expresses that result as a percentage of revenue. The Net Profit Calculator can also reveal how changes in COGS, payroll, rent, interest or tax assumptions affect profitability. Test conservative, expected and optimistic scenarios, but do not treat a projection as a guarantee.
Accounting profit is not identical to cash flow. Depreciation, accruals, working capital, debt principal and capital purchases can create important differences. Review applicable IFRS financial statement guidance or local standards for formal reporting. This Net Profit Calculator is an educational planning tool and does not replace professional accounting or tax advice. Recheck every input before making financial decisions.
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Gross Profit Calculator · Margin Calculator · ROI Calculator · Financial Calculators