Gross margin calculator
See the real gross margin on a project or retainer after delivery costs.
Gross margin calculator
Plug in your numbers - it updates as you type.
What is gross margin?
The share of revenue left after the direct cost of delivering the work (mostly billable staff time). The clearest measure of whether projects are profitable.
For example, if a $20,000 project costs $11,000 in delivery time, the gross profit is $9,000 and the gross margin is 45%. Watching margin per project quickly reveals which work and which clients are actually worth taking on.
Why it matters to agencies: gross margin is where an agency's profit is really decided - long before overheads. Thin margins usually trace back to under-pricing, scope creep or low utilisation, so tracking it by project and client shows exactly where to fix pricing or delivery.
Gross margin = (revenue - cost of delivery) ÷ revenue × 100
Cost of delivery is mainly billable staff time on the work.
Healthy agency delivery gross margins run roughly 50-65%; consistently below 40% usually signals under-pricing or low utilisation.
What is gross margin?
The share of revenue left after the direct cost of delivering the work (mostly billable staff time). The clearest measure of whether projects are profitable.
How do you calculate gross margin?
Subtract the direct cost of delivery from revenue, divide by revenue, and multiply by 100.
What is a good gross margin for an agency?
Healthy agencies often run delivery gross margins around 50-65%; consistently lower usually signals under-pricing or low utilisation.
What is the difference between gross margin and net margin?
Gross margin counts only the cost of delivering the work; net margin also subtracts overheads like rent, software and admin salaries.
Read the full definition: Gross margin in the agency glossary
See how Forge builds it: time tracking software for agencies
← all calculators