50,000 USD revenue, 32,000 USD costs
Gross profit is 50,000 minus 32,000, which is 18,000. Margin is 18,000 divided by 50,000, times 100, which is 36%.
Agency profit margin calculator
Profit margin shows how much of your agency’s revenue is actually profit once costs are covered, as a percentage you can track over time or compare across clients. This calculator subtracts your total costs from revenue to get gross profit, then divides gross profit by revenue and multiplies by 100 for the margin. A thin or negative margin on a client is a signal to raise price, cut cost, or offboard it.
Total revenue for the period or client you are measuring.
Everything spent to deliver the work: salaries, contractors, software, ad spend.
36.0%
Share of revenue remaining as profit after costs.
- Gross profit
- $18,000
Formula
gross profit = revenue − costs; margin = gross profit ÷ revenue × 100
How to use the agency profit margin calculator
- Enter revenue. Use the total revenue for the period or client you are measuring, before any costs are subtracted.
- Enter costs. Include everything spent to deliver the work: salaries, contractors, software and ad spend if you manage media.
- Read the gross profit. Gross profit is revenue minus costs, shown as a plain dollar figure before the percentage.
- Read the profit margin. Margin is gross profit divided by revenue, shown as a percentage so you can compare periods or clients of different sizes.
- Compare across clients or months. Run the same numbers for each client or period, since a single margin figure means little without something to compare it against.
Worked examples
15,000 USD revenue, 15,750 USD costs
Gross profit is 15,000 minus 15,750, which is -750. Margin is -750 divided by 15,000, times 100, which is -5%, meaning this client cost more to serve than it paid.
Agency profit margin FAQ
- How do you calculate profit margin for an agency?
- Subtract total costs from revenue to get gross profit, then divide gross profit by revenue and multiply by 100. A 36 percent margin means 36 cents of every revenue unit remained as profit after costs.
- What counts as costs in this calculator?
- Anything spent to deliver the work you are measuring: staff time, contractors, software, tools and any ad spend you manage on a client’s behalf. Leave out costs that do not relate to what you are measuring.
- What is a good profit margin for an agency?
- It varies widely by service mix and overhead, but many agencies target a margin somewhere in the 15 to 30 percent range per client, with some individual clients running much thinner or richer than the average.
- Should I calculate margin per client or for the whole agency?
- Both are useful for different decisions. A whole-agency margin shows overall health, while a per-client margin shows which specific clients are profitable and which are quietly losing money once their real cost to serve is counted.
- What does a negative margin mean?
- It means costs exceeded revenue for that period or client, so the work lost money rather than made it. That is usually a signal to raise price, cut scope, reduce cost, or consider offboarding the client.
- Is gross profit the same as net profit?
- No. Gross profit here is revenue minus the costs you enter, not a full accounting net profit after overhead, taxes and other business-wide expenses that this calculator does not ask for.
- Does the calculator store my revenue or cost numbers?
- No. The calculation happens entirely in your browser as you type, and nothing is uploaded or saved.
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