Microeconomics

Operating Margin Calculator

Enter revenue and operating costs to see the operating margin, the share of revenue left after the day-to-day costs of running the business.

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Revenue & operating costs

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Enter revenue and operating costs to see the operating margin.

Worked example

With these example inputs:

  • Revenue$100,000
  • Operating costs$85,000

Operating margin: 15.0%

  • Profit$15,000
  • Markup17.65%

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Frequently asked questions

What does operating margin measure?

It is operating profit as a share of revenue, after the costs of goods and running the business but before interest and tax. It reflects core operating efficiency.

How does it differ from gross margin?

Gross margin subtracts only the cost of goods. Operating margin also subtracts operating expenses such as wages, rent and marketing, so it is usually lower.