{"id":1142,"date":"2019-07-01T15:08:15","date_gmt":"2019-07-01T15:08:15","guid":{"rendered":"https:\/\/sage-new-clone.local\/en-au\/blog\/?post_type=sage_glossary&#038;p=1141"},"modified":"2026-02-05T20:23:17","modified_gmt":"2026-02-05T09:23:17","slug":"what-is-gross-profit","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-is-gross-profit\/","title":{"rendered":"What is gross profit?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/\" class=\"entry-header__link\">Glossary definition<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is gross profit?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is gross profit?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-is-gross-profit\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-gross-profit\">Gross profit<\/h2>\n\n\n\n<p>Gross profit is the financial gain of a company after deduction of the costs necessary to manufacture and distribute its goods or services. These costs are referred to collectively as the <a href=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/cost-goods-sold-cogs\/\">cost of goods sold<\/a>. The <a href=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-is-revenue\/\">revenue<\/a> of a company after it accounts for what had to be paid out to return that revenue is called the company\u2019s gross profit, meaning it is the amount of money actually earned.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-to-calculate-gross-profit\">How to calculate gross profit:<\/h3>\n\n\n\n<p>Gross Profit = Total Revenue \u2013 Total Cost of Goods Sold<\/p>\n\n\n\n<p>The general gross profit definition considers only variable costs for its deductions. These are any costs that increase or decrease the level of production output. <a href=\"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-is-fixed-cost\/\">Fixed costs<\/a> not directly tied to output such as insurance and rent are not factored in gross profit.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gross profit Gross profit is the financial gain of a company after deduction of the costs necessary to manufacture and distribute its goods or services. These costs are referred to collectively as the cost of goods sold. The revenue of a company after it accounts for what had to be paid out to return that [&hellip;]<\/p>\n","protected":false},"author":708,"featured_media":0,"template":"","meta":{"_sage_video":false,"footnotes":""},"tags":[208,215,200,211],"class_list":["post-1142","sage_glossary","type-sage_glossary","status-publish","hentry","tag-accounting-tips","tag-cash-flow","tag-small-business","tag-start-up"],"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Australia","distributor_original_site_url":"https:\/\/www.sage.com\/en-au\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary\/1142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary"}],"about":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/types\/sage_glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/users\/708"}],"version-history":[{"count":1,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary\/1142\/revisions"}],"predecessor-version":[{"id":4313,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/sage_glossary\/1142\/revisions\/4313"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/media?parent=1142"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-au\/blog\/api\/wp\/v2\/tags?post=1142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}