Calculate gross and net profit from price, unit cost, units sold and fixed costs.
Profit & Loss Calculator
Build a simple profit and loss statement: gross profit, operating profit, net profit and margins.
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How it works
- Gross profit = total income − cost of sales
- Operating profit = gross profit − operating expenses
- Profit before tax = operating profit + other income − interest paid
- Tax = profit before tax × tax rate (only if profit is positive)
- Net profit = profit before tax − tax
Each margin is that profit line divided by total income. This is a simplified estimate — real tax depends on allowances, deductions and assessed losses.
Example
A small café earns R1,200,000 in sales, spends R420,000 on ingredients (cost of sales) and R560,000 on rent, wages and other expenses. Gross profit is R780,000 (65%), operating profit R220,000 (18.3%). At 27% tax, net profit is R160,600 (13.4%).
Frequently asked questions
What is a profit and loss statement?
A P&L (income statement) summarises income and expenses for a period — a month, quarter or year — and shows whether the business made a profit. It is one of the three core financial statements, alongside the balance sheet and cash flow statement.
What is the difference between cost of sales and operating expenses?
Cost of sales (cost of goods sold) are costs that rise with each sale — stock, materials, direct labour. Operating expenses keep the business running regardless of sales — rent, salaries, software, marketing.
What tax rate should I use?
South African companies have been taxed at 27% for years of assessment ending on or after 31 March 2023. Sole proprietors are taxed at individual rates instead, and small business corporations may qualify for different rates. Set the rate to match your situation, or 0 to see profit before tax only.
Is profit the same as cash?
No. You can be profitable on paper but short of cash — for example when customers pay late or you buy stock in advance. Track cash flow separately.
Related tools
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