Enter the total revenue ($) and the total direct costs ($) into the Direct Margin Calculator. The calculator will evaluate and display the Direct Margin. 

Direct Margin Formula

The following formula is used to calculate the Direct Margin. 

DM = (TR-DC) / TR *100

  • Where DM is the Direct Margin (%)
  • TR is the total revenue ($) 
  • DC is the total direct costs ($) 

How to Calculate Direct Margin?

The following example problems outline how to calculate Direct Margin.

Example Problem #1:

  1. First, determine the total revenue ($). 
    • The total revenue ($) is given as: 600.
  2. Next, determine the total direct costs ($). 
    • The total direct costs ($) is provided as: 300.
  3. Finally, calculate the Direct Margin using the equation above: 

DM = (TR-DC) / TR *100

The values given above are inserted into the equation below and the solution is calculated:

DM = (600-300) / 600 *100 = 50 (%)


Example Problem #2: 

For this problem, the variables required are provided below:

total revenue ($) = 700

total direct costs ($) = 300

Test your knowledge using the equation and check your answer with the calculator above.

DM = (TR-DC) / TR *100 = ?