Free EBITDA margin calculator 2026. Calculate EBITDA margin = EBITDA / revenue × 100. See how EBITDA strips out financing and accounting decisions for operational comparison. Industry benchmarks included.
Enter your company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization — or Operating Income/EBIT plus D&A).
Enter your Total Revenue for the same period (monthly, quarterly, or trailing 12 months).
Review your EBITDA Margin percentage, EBITDA per $1.00 of revenue, and industry profitability rating.
EBITDA Margin measures a company's core operational profitability as a percentage of total revenue before accounting for financing structure (interest), tax jurisdiction (income taxes), and non-cash capital depreciation and amortization. It is the primary profitability metric used in M&A, private equity buyouts, and corporate valuation.
$2,400,000 Operating Income (EBIT) + $600,000 D&A = $3,000,000 EBITDA on $10,000,000 revenue. EBITDA Margin = 30.0% ($0.30 per $1 of revenue). If growing 20% YoY, Rule of 40 score = 50% (Elite).
$650,000 Net Income + $80,000 Interest + $140,000 Taxes + $130,000 Fleet Depreciation = $1,000,000 EBITDA. EBITDA Margin = 20.0%.
$220,000 EBITDA on $2,000,000 revenue = 11.0% EBITDA Margin ($0.11 per $1 of revenue).
| Industry Sector | Average EBITDA Margin | Top-Quartile EBITDA Margin | Typical EV/EBITDA Multiple |
|---|---|---|---|
| B2B Software / Mature SaaS | 22% – 32% | 35% – 45%+ | 14x – 22x EBITDA |
| IT Services / Managed Service Providers (MSP) | 12% – 18% | 20% – 26% | 8x – 13x EBITDA |
| Healthcare Services & Clinics | 14% – 20% | 22% – 28% | 9x – 14x EBITDA |
| Industrial Manufacturing | 11% – 16% | 18% – 24% | 6.5x – 10x EBITDA |
| HVAC / Plumbing / Commercial Trades | 12% – 18% | 20% – 28% | 5.5x – 9.5x EBITDA |
| E-Commerce / Specialty Retail | 7% – 13% | 15% – 20% | 5x – 8.5x EBITDA |
| Restaurants & Hospitality | 8% – 14% | 16% – 22% | 4.5x – 7.5x EBITDA |
| Staffing & Recruiting Agencies | 6% – 11% | 13% – 18% | 5x – 8x EBITDA |
When acquiring a business, buyers want to know how much operating cash flow the underlying business engine produces, independent of how the previous owner chose to finance the company (debt vs. equity) or structure its taxes. Two identical manufacturing businesses might have vastly different Net Income if one owner took out a high-interest SBA loan and accelerated equipment depreciation while the other paid cash.
By adding Interest, Taxes, Depreciation, and Amortization back to Net Income, **EBITDA** puts both companies on a level playing field. Furthermore, expanding your EBITDA margin creates a **double compounding effect** on exit valuation: increasing EBITDA from $1M to $1.5M (by lifting margin from 10% to 15% on $10M revenue) often moves a company from a 5x multiple ($5M valuation) to a 7x multiple ($10.5M valuation)—more than doubling enterprise value.
Find answers to the most common questions about ebitda margin calculator.
Across all private US industries, a 10% to 15% EBITDA margin is considered healthy, and 20%+ is strong. However, benchmarks vary widely by sector: software and SaaS companies target 25% to 40%+, professional services and healthcare target 15% to 25%, manufacturing averages 12% to 18%, and retail/grocery operates on 5% to 10%.
The fastest and most accurate method is top-down from Operating Income: take Operating Income (EBIT) from your P&L and add back Depreciation and Amortization (found on your Cash Flow Statement or P&L). Alternatively, start with Net Income and add back Income Taxes, Interest Expense, Depreciation, and Amortization.
Gross Margin deducts only direct Cost of Goods Sold (COGS). Operating Margin (EBIT Margin) deducts COGS plus all operating expenses (SG&A, R&D, depreciation, amortization). EBITDA Margin is Operating Margin with non-cash Depreciation and Amortization added back, meaning EBITDA Margin is always equal to or higher than Operating Margin.
Adjusted EBITDA normalizes a company's historical EBITDA by adding back non-recurring, one-time, or personal owner expenses that will not continue after an acquisition—such as a one-time lawsuit settlement, office relocation cost, or above-market owner compensation.
Calculations and computational models on QuickBizCalc are verified against published regulatory standards and statutory tax tables:
Publication 15-T (Federal Income Tax Withholding Methods) & Publication 15 (Employer's Tax Guide).
Fair Labor Standards Act (FLSA 29 U.S.C. § 207) regulations on overtime hours, recordkeeping, and minimum wage.
OASDI taxable maximum wage base limits and statutory FICA tax rates (6.2% Social Security + 1.45% Medicare).
Formulas and worked examples are checked against the sources above before publishing. For advice on your own situation, consult a licensed tax professional or accountant.
EBITDA Margin
30.00%
EBITDA
$300,000.00
Revenue
$1,000,000.00
EBITDA Margin
30.00%
Per $1 Rev
$0.30
