💰 Profit Calculator
Transaction Details
Net Profit
Profit Summary
| Total Revenue | PKR 15,000 |
| Total Cost | PKR 10,000 |
| Additional Expenses | PKR 0 |
| Net Profit / Loss | PKR 5,000 |
How to Use the Profit Calculator
Whether you run a small shop in Lahore or manage an e-commerce store, understanding your profit margins is essential for healthy business decisions. This calculator gives you three key metrics: Net Profit, Profit Margin (profit as a % of selling price), and Markup (profit as a % of cost price).
Enter your cost price, selling price, quantity, and any additional expenses (shipping, packaging, commissions). The calculator instantly computes all three metrics so you know whether your pricing is profitable and by how much.
Net profit ÷ selling price × 100 — used by retailers globally
Net profit ÷ cost price × 100 — useful for pricing products
Calculate profit for any quantity with added expenses
📖 Complete Guide to Profit, Margin & Markup Calculation for Pakistani Businesses
Profit Margin vs Markup — The Difference Most Business Owners Get Wrong
This is the most common source of confusion in Pakistani retail and wholesale businesses. Both seem similar but are calculated differently and produce very different numbers:
| Concept | Formula | Based On | Example (Cost PKR 100, Sell PKR 150) |
|---|---|---|---|
| Profit Margin | Profit ÷ Selling Price × 100 | Selling price | 50 ÷ 150 × 100 = 33.3% |
| Markup | Profit ÷ Cost Price × 100 | Cost price | 50 ÷ 100 × 100 = 50% |
The same PKR 50 profit produces a 33.3% margin but a 50% markup. When a supplier quotes "30% margin" and you calculate "30% markup," you are comparing different things. Always clarify which basis is being used — especially when setting prices, negotiating with distributors, or comparing offers.
Key Profit Formulas — Quick Reference
| What You Want | Formula |
|---|---|
| Gross Profit | Selling Price − Cost of Goods |
| Gross Profit Margin % | (Selling Price − Cost) ÷ Selling Price × 100 |
| Markup % | (Selling Price − Cost) ÷ Cost × 100 |
| Selling Price (from cost + margin) | Cost ÷ (1 − Margin%/100) |
| Selling Price (from cost + markup) | Cost × (1 + Markup%/100) |
| Net Profit | Gross Profit − Operating Expenses − Tax |
| Net Profit Margin % | Net Profit ÷ Revenue × 100 |
| Break-even Units | Fixed Costs ÷ (Selling Price − Variable Cost per unit) |
Worked Examples — Pakistani Retail Scenarios
Example 1: Cloth Merchant in Lahore
| Component | Amount (PKR) |
|---|---|
| Purchase price per meter (cost) | 800 |
| Selling price per meter | 1,100 |
| Gross Profit per meter | 300 |
| Profit Margin | 300 ÷ 1,100 = 27.3% |
| Markup on cost | 300 ÷ 800 = 37.5% |
| Monthly sales (500 meters) | 550,000 |
| Monthly gross profit | 150,000 |
| Monthly operating expenses (rent, staff, utilities) | −70,000 |
| Monthly Net Profit | PKR 80,000 |
Example 2: Online Retailer (Daraz/WhatsApp Business)
| Component | Amount (PKR) |
|---|---|
| Product cost (from supplier) | 2,500 |
| Packaging + delivery charges | 200 |
| Platform commission (Daraz ~5%) | 150 |
| Total Cost | 2,850 |
| Selling price | 3,800 |
| Net Profit per unit | 950 |
| Net Profit Margin | 950 ÷ 3,800 = 25% |
Industry Benchmark Margins in Pakistan
| Industry / Sector | Typical Gross Margin | Typical Net Margin |
|---|---|---|
| Grocery / FMCG retail | 5%–15% | 2%–5% |
| Clothing & textile retail | 30%–50% | 10%–20% |
| Electronics & mobiles | 5%–12% | 2%–5% |
| Restaurant / food | 60%–70% | 8%–15% |
| Construction materials | 10%–20% | 4%–8% |
| Pharmaceutical retail | 15%–25% | 5%–10% |
| IT services / freelancing | 60%–80% | 40%–60% |
| Wholesale distribution | 3%–8% | 1%–3% |
Common Pricing Mistakes Pakistani Small Businesses Make
- Confusing markup with margin: Setting a "30% markup" when you meant "30% margin" means you are actually making 23.1% margin — a significant difference on high volumes
- Not including all costs: Forgetting to include delivery, packaging, returns, wastage, and platform fees in your cost calculation leads to overestimated profits
- Not accounting for taxes: Small businesses under the Budget 2026-27 Fixed Tax Scheme pay 1% of turnover. Add this to your cost calculation to find true net profit
- Discounting without recalculating margin: A 10% discount on a product with 20% margin wipes out half your profit. Always calculate the new margin before offering discounts
- Comparing to competitors without knowing their cost structure: A competitor selling cheaper may have lower costs, higher volume discounts, or simply be running at a loss
Tax on Business Profit — Budget 2026-27
Business income in Pakistan is taxed differently depending on your business size and structure:
| Business Type | Tax Treatment | Rate (2026-27) |
|---|---|---|
| Small retailer (annual sales ≤ PKR 10 crore) | Fixed Tax Scheme (Section 99B) | 1% of annual turnover |
| Sole proprietor / AOP | Business income slabs | 0%–30% progressive |
| Private limited company | Corporate tax | 20% (reduced from 29%) |
| Small company | Small company rate | 20% |
| IT/freelancing (export income) | Final Tax Regime | 0.25% of export receipts |
Budget 2026-27 introduced a major simplification for small retailers — a flat 1% of sales with no audit, no POS requirement, and a simple one-page Urdu return. See our Budget 2026-27 Tax Proposals guide for full details.
Frequently Asked Questions — Profit & Margin Calculator Pakistan
Profit Margin = (Profit ÷ Selling Price) × 100. Markup = (Profit ÷ Cost Price) × 100. They sound similar but give different numbers. If you buy at PKR 100 and sell at PKR 150, your markup is 50% but your profit margin is 33.3%. Retailers typically think in markup; investors and analysts use margin. Knowing the difference prevents serious pricing mistakes.
It varies significantly by industry. In Pakistan: Grocery/FMCG retail: 5–15% margin | Clothing/apparel: 30–50% | Restaurant/food: 15–30% | Electronics retail: 5–12% | Manufacturing: 10–20% | Services/consulting: 40–70%. If your margin is below the industry average, you are either underpricing, overbuying, or missing hidden costs. Use this calculator to find your exact numbers before comparing.
Use the formula: Net Profit = (Selling Price × Quantity) − (Cost Price × Quantity) − Additional Expenses. Additional expenses include transport, packaging, shop rent allocation, and employee wages for that product. Many small traders in Pakistan forget to include transport and packaging costs, which significantly reduces their actual profit. Enter all these in the 'Additional Expenses' field for an accurate result.
Beyond the direct cost price, include: Transport/delivery costs to bring goods to your location | Packaging (bags, boxes, wrapping) | Storage costs if applicable | Agent or broker commission | Customs duty or import charges for imported goods | Wastage allowance for perishable items. Many small businesses in Pakistan underestimate costs and wonder why their bank balance doesn't match their expected profit — these hidden costs are usually the reason.
Revenue is the total amount you earn from sales. Profit is revenue minus all costs (what you actually keep). Cash flow is actual money moving in and out — you can be profitable on paper but cash-flow negative if customers haven't paid yet. In Pakistan's business environment where credit sales are common, many profitable businesses face cash crunches. Always track all three separately.
Yes. For gold trading, enter your purchase price per tola, selling price per tola, and quantity in tolas. For currency exchange or hawala-related profit calculation, enter the PKR buying and selling rates as cost and selling price. The profit margin and markup calculations work the same way regardless of the product. Just ensure you include all transaction costs (bank charges, broker fees, spread) in the Additional Expenses field.
For retail businesses in Pakistan, target profit margins vary by sector: Grocery / FMCG: 8–15%; Clothing and textiles: 25–40%; Electronics: 5–12%; Pharmaceuticals: 15–25%; Restaurants: 10–20%. Online businesses often achieve 20–35% margins. Your net margin after all expenses (rent, salaries, utilities, taxes) should be your real benchmark — not just the gross margin on each product.
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