Profit Margin Calculator Australia — FY 2024-25
Calculate gross, operating, and net profit margins for your business. For Australia. Uses current FY 2024-25 data.
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Total sales or income for the period
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Direct costs: materials, manufacturing, direct labour
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Rent, salaries (admin), marketing, utilities
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Loan interest payments and income/GST tax paid
Common questions — Australia
What is a good profit margin for different businesses?
Varies enormously by industry. Software/SaaS: 60–80% gross, 20–40% net. Consulting: 50–70% gross, 15–30% net. Restaurant: 60–70% gross, 3–9% net. Retail: 30–50% gross, 2–6% net. Manufacturing: 20–40% gross, 5–12% net. Compare to industry peers, not cross-sector averages.
What is the difference between markup and margin?
Markup is based on cost: (Selling price - Cost) / Cost × 100. Margin is based on selling price: (Selling price - Cost) / Selling price × 100. A 50% markup = 33% margin. A 100% markup = 50% margin. Margin is more useful for understanding profitability; markup is more useful for setting prices.
How do I improve gross margin?
Raise prices (hardest psychologically but highest impact), reduce COGS (negotiate with suppliers, improve manufacturing efficiency, reduce waste), change product mix (sell more of high-margin products), reduce discounting.
What is EBITDA and why do investors use it?
EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortisation. It approximates cash operating profit by removing non-cash charges and financing costs. Investors use EBITDA multiples (e.g., Enterprise Value / EBITDA) for business valuation because it enables comparison across companies with different capital structures.
Can a business survive with low margins?
Yes — if volume is high enough. Supermarkets operate on 2–4% net margin but with massive volume. The risk: any cost shock (inflation, rent increase, labour cost) can tip a low-margin business negative. High-margin businesses have more buffer to survive disruption.