SaaS Gross Margin Calculator
Calculate gross margin from revenue and cost of goods sold, with SaaS specific guidance on what belongs in COGS.
Gross margin
What it measures
Gross margin is revenue minus the direct cost of serving it, as a share of revenue. For SaaS the direct costs are hosting, customer support, and third party services baked into delivery.
Why it matters
Gross margin decides how much of every sale is left to fund growth. It also anchors valuation: software multiples assume software margins.
A worked example
100,000 revenue with 18,000 in hosting and support costs is an 82 percent gross margin, right in the healthy SaaS band.
How to read and improve it
Below 70 percent, look at infrastructure efficiency and how much human service is hiding inside delivery.
Frequently asked questions
What belongs in SaaS COGS?
Hosting, support staff, onboarding delivery and any per customer third party fees. Sales and R&D stay out.
What is a good SaaS gross margin?
75 to 85 percent is typical. Under 70 usually means services or infrastructure are eating the model.
More in SaaS metrics: SaaS CAC Calculator · Customer Lifetime Value Calculator · Churn Rate Calculator
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