Net Profit Margin Calculator
Calculate your business’s profitability with precision. Enter your financials below to determine your net profit margin percentage.
Introduction & Importance of Net Profit Margin
Understanding your net profit margin is crucial for assessing your business’s financial health and operational efficiency.
Net profit margin, often simply called “net margin,” is one of the most important financial metrics for any business. It represents what percentage of each dollar of revenue remains as profit after accounting for all expenses. This single percentage tells you more about your business’s efficiency than almost any other financial ratio.
Unlike gross margin (which only considers cost of goods sold), net profit margin accounts for all business expenses including:
- Cost of goods sold (COGS)
- Operating expenses (salaries, rent, utilities)
- Interest payments on debt
- Taxes
- One-time expenses or unusual costs
Why does this matter? Because net profit margin reveals your company’s true profitability. A business might have strong revenue growth but if expenses are growing faster, the net margin will decline – an early warning sign of potential financial trouble.
Industry benchmarks vary significantly. According to IRS data, the average net profit margin across all industries is about 7-10%, but top-performing companies in many sectors achieve 15-20% or higher. Technology companies often have higher margins (20-30%) while retail and manufacturing typically see lower margins (2-5%).
Tracking your net margin over time helps you:
- Identify cost control opportunities
- Compare performance against competitors
- Make informed pricing decisions
- Attract investors with proof of profitability
- Plan for sustainable growth
How to Use This Net Profit Margin Calculator
Follow these step-by-step instructions to get accurate results from our calculator.
Our interactive calculator makes it simple to determine your net profit margin. Here’s how to use it effectively:
-
Enter Your Total Revenue
This is your total sales before any expenses are deducted. Include all revenue streams from product sales, services, subscriptions, etc. For annual calculations, use your total yearly revenue. -
Input Cost of Goods Sold (COGS)
These are the direct costs attributable to the production of the goods sold by your company. This includes materials and direct labor costs. Don’t include indirect expenses like distribution or sales force costs. -
Add Operating Expenses
These are the costs required for the day-to-day operation of your business that aren’t directly tied to production. Common operating expenses include:- Salaries and wages (non-production)
- Rent and utilities
- Marketing and advertising
- Office supplies
- Depreciation and amortization
-
Include Other Income
This captures any revenue from non-core business activities. Examples might include:- Investment income
- Sale of assets
- Royalty income
- Foreign exchange gains
-
Enter Taxes Paid
Include all income taxes paid during the period. For corporations, this would be your corporate tax rate applied to taxable income. -
Add Interest Expenses
This is the cost of borrowing money. Include interest on loans, credit lines, and any other debt instruments. -
Click “Calculate Net Margin”
Our calculator will instantly compute:- Gross Profit (Revenue – COGS)
- Operating Income (Gross Profit – Operating Expenses)
- Net Income (Operating Income + Other Income – Taxes – Interest)
- Net Profit Margin (Net Income ÷ Revenue × 100)
-
Analyze Your Results
The calculator provides both dollar amounts and the critical percentage margin. Compare this to:- Your previous periods to track trends
- Industry benchmarks for context
- Your business goals and targets
Pro Tip: For most accurate results, use numbers from your official income statement (profit and loss statement). If you’re projecting future performance, use your most realistic estimates for each category.
Net Profit Margin Formula & Methodology
Understand the precise mathematical foundation behind net profit margin calculations.
The net profit margin formula is deceptively simple in appearance but requires careful attention to what’s included in each component:
Let’s break down each component with precise definitions:
1. Net Income Calculation
Net income represents the company’s total earnings after all expenses have been deducted from revenues. The full calculation is:
Net Income = (Total Revenue - COGS - Operating Expenses - Interest - Taxes) + Other Income
2. Total Revenue
Also called “total sales” or “gross revenue,” this is the total amount of money generated from normal business operations before any expenses are subtracted. It includes:
- Sales of products or services
- Subscription fees
- Licensing revenue
- Any other income from primary business activities
Important: Revenue is recorded when earned (according to accrual accounting), not necessarily when cash is received.
3. Cost of Goods Sold (COGS)
These are the direct costs attributable to the production of the goods sold by a company. COGS includes:
- Cost of materials and raw materials
- Direct labor costs
- Manufacturing overhead directly tied to production
- Freight-in costs (shipping costs for materials)
Excluded from COGS: Selling, general, and administrative expenses (SG&A) and other indirect expenses.
4. Operating Expenses
These are the costs required for the day-to-day operation of the business, excluding COGS. Typical operating expenses include:
| Expense Category | Examples | Typical % of Revenue |
|---|---|---|
| Salaries & Wages | Non-production staff, management | 15-30% |
| Rent & Utilities | Office space, warehouse, electricity | 5-15% |
| Marketing & Sales | Advertising, promotions, sales commissions | 10-20% |
| Research & Development | Product development, testing | 5-15% (higher in tech) |
| Administrative | Office supplies, software, legal fees | 5-10% |
| Depreciation & Amortization | Asset wear-and-tear, intangible asset expenses | 2-8% |
5. Other Income/Expenses
These are non-operating items that affect net income but aren’t part of core business operations:
- Other Income: Investment income, asset sales, foreign exchange gains
- Other Expenses: Restructuring costs, lawsuit settlements, write-downs
6. Interest and Taxes
These are typically the final deductions before arriving at net income:
- Interest Expense: Cost of borrowing money (loans, credit lines, bonds)
- Income Taxes: Corporate taxes based on taxable income (after all deductions)
For publicly traded companies, you’ll often see “net income attributable to shareholders” which subtracts any non-controlling interests.
Alternative Variations
While the standard formula is most common, some analysts use these variations:
- Operating Profit Margin: (Operating Income ÷ Revenue) × 100
- Pre-Tax Margin: (Earnings Before Tax ÷ Revenue) × 100
- EBITDA Margin: (EBITDA ÷ Revenue) × 100
Our calculator uses the standard net profit margin formula as it provides the most complete picture of profitability after all expenses.
Real-World Net Profit Margin Examples
Analyze these detailed case studies to understand how net margin works in different industries.
Example 1: E-commerce Retailer
Business: Online store selling premium kitchenware
Annual Revenue: $2,500,000
Industry: E-commerce (Specialty Retail)
| Metric | Amount | % of Revenue |
|---|---|---|
| Total Revenue | $2,500,000 | 100% |
| Cost of Goods Sold | $1,250,000 | 50% |
| Gross Profit | $1,250,000 | 50% |
| Operating Expenses | $875,000 | 35% |
| Operating Income | $375,000 | 15% |
| Other Income | $25,000 | 1% |
| Interest Expense | $50,000 | 2% |
| Taxes | $100,000 | 4% |
| Net Income | $250,000 | 10% |
Net Profit Margin: 10%
Analysis: This 10% margin is excellent for e-commerce, where average margins typically range from 5-10%. The business maintains strong gross margins (50%) but faces significant operating costs (35%) common in online retail (warehousing, shipping, marketing). The owner could explore reducing operating expenses to improve margins further.
Example 2: Software as a Service (SaaS) Company
Business: Cloud-based project management software
Annual Revenue: $5,000,000
Industry: Technology (SaaS)
| Metric | Amount | % of Revenue |
|---|---|---|
| Total Revenue | $5,000,000 | 100% |
| Cost of Goods Sold | $1,000,000 | 20% |
| Gross Profit | $4,000,000 | 80% |
| Operating Expenses | $2,500,000 | 50% |
| Operating Income | $1,500,000 | 30% |
| Other Income | $50,000 | 1% |
| Interest Expense | $0 | 0% |
| Taxes | $300,000 | 6% |
| Net Income | $1,250,000 | 25% |
Net Profit Margin: 25%
Analysis: The 25% net margin is outstanding for a SaaS business, where top performers typically achieve 20-30% margins. The high gross margin (80%) is characteristic of software businesses with minimal COGS (mostly server costs and customer support). The company reinvests heavily in growth (50% operating expenses likely include significant R&D and sales/marketing), which is common in scaling SaaS businesses.
Example 3: Local Manufacturing Business
Business: Custom metal fabrication shop
Annual Revenue: $1,200,000
Industry: Light Manufacturing
| Metric | Amount | % of Revenue |
|---|---|---|
| Total Revenue | $1,200,000 | 100% |
| Cost of Goods Sold | $840,000 | 70% |
| Gross Profit | $360,000 | 30% |
| Operating Expenses | $250,000 | 20.8% |
| Operating Income | $110,000 | 9.2% |
| Other Income | $5,000 | 0.4% |
| Interest Expense | $20,000 | 1.7% |
| Taxes | $25,000 | 2.1% |
| Net Income | $70,000 | 5.8% |
Net Profit Margin: 5.8%
Analysis: The 5.8% margin is typical for small manufacturing operations where COGS is high (70% in this case due to material and labor costs). The business shows good cost control with operating expenses at 20.8% of revenue. To improve margins, the owner could:
- Negotiate better material pricing with suppliers
- Invest in more efficient equipment to reduce labor costs
- Explore higher-margin custom work
- Implement lean manufacturing principles
These examples demonstrate how net profit margins vary dramatically by industry. A 5% margin might be excellent for a manufacturer but poor for a software company. Always compare your margins to industry benchmarks rather than absolute percentages.
Net Profit Margin Data & Industry Statistics
Compare your performance against these comprehensive industry benchmarks and historical trends.
Understanding how your net profit margin compares to industry averages is crucial for proper financial analysis. Below are detailed benchmarks from U.S. Census Bureau data and IRS corporate statistics:
Industry Net Profit Margin Benchmarks (2023)
| Industry Sector | Average Net Margin | Top Quartile | Bottom Quartile | Revenue Range |
|---|---|---|---|---|
| Software & Technology | 18.2% | 30%+ | 8% | $1M – $500M+ |
| Pharmaceuticals & Biotechnology | 15.7% | 25%+ | 5% | $10M – $50B+ |
| Financial Services | 14.3% | 22% | 7% | $5M – $100B+ |
| Healthcare Services | 10.1% | 18% | 3% | $2M – $20B+ |
| Consumer Staples | 8.7% | 15% | 2% | $5M – $200B+ |
| Industrial Manufacturing | 7.4% | 12% | 3% | $3M – $100B+ |
| Retail (General) | 4.2% | 8% | 1% | $1M – $300B+ |
| Automotive | 3.8% | 7% | 0.5% | $10M – $500B+ |
| Airlines | 2.1% | 5% | -2% | $50M – $50B+ |
| Restaurants (Full Service) | 3.5% | 8% | -1% | $500K – $50M |
Net Profit Margin Trends by Business Size
Smaller businesses typically have lower net margins due to economies of scale. Here’s how margins correlate with business size:
| Business Size (Annual Revenue) | Average Net Margin | Key Challenges | Opportunities |
|---|---|---|---|
| $0 – $500K | 2.1% | High fixed costs relative to revenue, owner often works IN business rather than ON business | Focus on niche markets, outsource non-core functions |
| $500K – $2M | 4.8% | Growing pains, cash flow management, hiring challenges | Implement systems, negotiate better supplier terms |
| $2M – $10M | 7.3% | Middle management layer adds cost, market competition intensifies | Leverage technology, expand product lines |
| $10M – $50M | 9.5% | Complexity increases, regulatory compliance costs rise | Acquisitions, international expansion |
| $50M – $250M | 11.2% | Bureaucracy can slow decision making, maintaining culture | Economies of scale, brand recognition |
| $250M+ | 12.8% | Shareholder expectations, market saturation in core products | Diversification, innovation budgets |
Historical Net Margin Trends (2010-2023)
Analyzing historical data from the Bureau of Economic Analysis reveals several important trends:
- 2010-2015: Post-recession recovery saw margins expand from 6.8% to 8.2% as businesses cut costs aggressively
- 2016-2019: Stable period with margins averaging 8.5-9.1% as economic growth continued
- 2020: COVID-19 pandemic caused wild variations – some industries (tech, healthcare) saw margin expansion while others (travel, retail) experienced severe compression
- 2021-2022: Supply chain disruptions and inflation pressured margins across most sectors, with average net margins dropping to 7.3%
- 2023: Partial recovery to 7.8% as supply chains normalized but labor costs remained elevated
These trends highlight the importance of:
- Building cash reserves during high-margin periods
- Maintaining flexible cost structures
- Diversifying revenue streams to mitigate sector-specific downturns
- Continuously monitoring margin trends rather than single-period snapshots
International Comparisons
Net profit margins also vary significantly by country due to differences in labor costs, tax policies, and market maturity:
- United States: 7.8% average (2023)
- Germany: 5.2% (higher labor costs, strong social programs)
- Japan: 3.9% (mature markets, deflationary pressures)
- China: 6.5% (rapid growth but increasing competition)
- India: 8.3% (growing middle class, lower labor costs)
- Brazil: 4.1% (economic volatility, high interest rates)
When benchmarking your business, consider:
- Your specific industry segment (not just broad category)
- Business size and stage of growth
- Geographic market characteristics
- Current economic conditions
- Your business model (B2B vs B2C, product vs service)
Expert Tips to Improve Your Net Profit Margin
Implement these proven strategies to systematically increase your profitability.
Improving your net profit margin requires a strategic approach that balances revenue growth with cost optimization. Here are 15 expert-recommended tactics:
Revenue Enhancement Strategies
-
Implement Value-Based Pricing
Move away from cost-plus pricing to value-based models where prices reflect the benefits customers receive. This often allows for 10-30% price increases without volume loss.- Conduct customer surveys to understand perceived value
- Create premium product/service tiers
- Bundle complementary offerings
-
Focus on High-Margin Products/Services
Use contribution margin analysis to identify your most profitable offerings and prioritize them.- Allocate marketing budget proportionally to margin contribution
- Consider discontinuing or repricing low-margin items
- Train sales teams to upsell higher-margin options
-
Improve Sales Team Performance
Even small improvements in close rates or average deal sizes can significantly impact margins.- Implement CRM systems to track performance
- Provide ongoing sales training
- Align compensation with profitability (not just revenue)
-
Expand to Higher-Margin Markets
Geographic or demographic expansion can open new revenue streams with better margins.- Research underserved niche markets
- Consider international expansion carefully
- Test new customer segments with pilot programs
-
Implement Recurring Revenue Models
Subscription or retainer models provide predictable revenue and often higher margins.- Convert one-time sales to subscription where possible
- Offer maintenance contracts or service agreements
- Create membership programs with exclusive benefits
Cost Optimization Techniques
-
Renegotiate Supplier Contracts
Regularly review all vendor agreements – many businesses find 10-20% savings available.- Consolidate purchases with fewer suppliers for volume discounts
- Explore alternative suppliers, including international options
- Implement just-in-time inventory to reduce carrying costs
-
Optimize Labor Costs
Labor is typically the largest operating expense – small improvements compound significantly.- Implement productivity metrics and incentives
- Cross-train employees to handle multiple roles
- Consider flexible staffing models (part-time, contract, remote)
- Automate repetitive tasks where possible
-
Reduce Overhead Expenses
Every dollar saved in overhead goes straight to your bottom line.- Renegotiate lease agreements or consider co-working spaces
- Implement energy-saving measures to reduce utilities
- Move to cloud-based systems to reduce IT infrastructure costs
- Outsource non-core functions (HR, accounting, IT support)
-
Improve Inventory Management
Excess inventory ties up cash and may lead to write-downs.- Implement inventory management software
- Use ABC analysis to focus on high-value items
- Negotiate consignment arrangements with suppliers
- Implement vendor-managed inventory where appropriate
-
Optimize Marketing Spend
Focus on high-ROI marketing channels and eliminate waste.- Implement rigorous tracking of marketing attribution
- Shift budget to digital channels with better measurability
- Leverage organic growth through SEO and content marketing
- Test and refine messaging for better conversion rates
Operational Efficiency Improvements
-
Implement Lean Principles
Systematically eliminate waste in all business processes.- Map key processes to identify bottlenecks
- Empower front-line employees to suggest improvements
- Implement continuous improvement (Kaizen) programs
-
Upgrade Technology Systems
Modern software can dramatically improve efficiency.- Implement ERP systems for better resource planning
- Use CRM to improve sales efficiency
- Automate reporting and data analysis
-
Improve Cash Flow Management
Better cash flow reduces financing costs and improves negotiating position.- Implement stricter credit policies
- Offer early payment discounts to customers
- Negotiate better payment terms with suppliers
- Use cash flow forecasting tools
-
Enhance Customer Retention
Retaining customers is 5-25x cheaper than acquiring new ones.- Implement loyalty programs
- Provide exceptional customer service
- Regularly gather and act on customer feedback
- Create customer success programs
-
Optimize Your Product Mix
Strategically manage your offerings to maximize overall profitability.- Regularly review product profitability
- Bundle low-margin items with high-margin ones
- Consider discontinuing consistently unprofitable products
- Introduce premium versions of popular items
Advanced Strategies
For businesses ready to take margin improvement to the next level:
- Implement Activity-Based Costing: More accurately allocate overhead costs to understand true product profitability
- Develop Strategic Partnerships: Collaborate with complementary businesses to share costs and access new markets
- Explore Vertical Integration: Bring high-cost activities in-house when it improves margins (but beware of losing focus)
- Invest in Employee Training: Better-skilled employees make fewer costly mistakes and work more efficiently
- Consider Alternative Funding: Reduce interest expenses by exploring equity financing or revenue-based financing
Important Caution: While improving net profit margin is crucial, never sacrifice long-term value for short-term margin gains. Avoid:
- Cutting essential R&D that fuels future growth
- Reducing product quality that hurts brand reputation
- Underinvesting in customer service that leads to churn
- Overworking employees leading to burnout and turnover
Net Profit Margin FAQs
Get answers to the most common questions about calculating and interpreting net profit margins.
What’s the difference between net profit margin and gross profit margin?
This is one of the most important distinctions in financial analysis:
- Gross Profit Margin: Calculates profit after subtracting only the Cost of Goods Sold (COGS) from revenue. Formula: (Revenue – COGS) ÷ Revenue × 100
- Net Profit Margin: Calculates profit after all expenses (COGS, operating expenses, interest, taxes) have been deducted. Formula: Net Income ÷ Revenue × 100
Example: A company with $1M revenue, $600K COGS, and $300K other expenses would have:
- Gross Margin: ($1M – $600K) ÷ $1M = 40%
- Net Margin: ($1M – $600K – $300K) ÷ $1M = 10%
Gross margin shows production efficiency while net margin shows overall profitability.
What’s considered a “good” net profit margin?
“Good” is relative to your industry, business size, and growth stage. Here’s a general framework:
- Excellent: Top 10% in your industry (often 15-30%+ depending on sector)
- Good: Above industry average (typically 10-20% for most industries)
- Average: Close to industry benchmark (5-15% for most industries)
- Below Average: More than 2-3 points below industry norm
- Problematic: Consistently below 5% (unless in very low-margin industry like grocery)
Key considerations:
- Startups often have negative margins initially as they invest in growth
- High-growth companies may accept lower margins temporarily
- Mature businesses should target above-average margins
- Compare to direct competitors, not just industry averages
Use our industry benchmark table above for specific comparisons.
How often should I calculate my net profit margin?
The frequency depends on your business size and volatility:
- Startups/Small Businesses: Monthly (critical for cash flow management)
- Growing Businesses: Quarterly (with monthly flash reports)
- Established Companies: Quarterly (with annual deep dives)
- Seasonal Businesses: Monthly during peak seasons, quarterly otherwise
Best practices:
- Calculate after each accounting period close
- Compare to same period last year (YoY comparison)
- Analyze trends over 3-5 years, not just single periods
- Recalculate after major business changes (new products, acquisitions)
Pro Tip: Set up dashboard tracking with your accounting software to monitor margins in real-time.
Why might my net profit margin be decreasing even if revenue is increasing?
This common scenario typically results from one or more of these issues:
-
Rising Cost of Goods Sold:
- Material costs increasing faster than you can raise prices
- Supply chain disruptions causing higher input costs
- Labor shortages driving up production wages
-
Increasing Operating Expenses:
- Adding staff or infrastructure faster than revenue growth
- Marketing spend increasing to support growth
- Rent or utility costs rising
-
Price Erosion:
- Competitive pressure forcing price reductions
- Discounting to drive volume without proportional cost savings
- Customer mix shifting to lower-margin products/services
-
Product Mix Changes:
- Selling more lower-margin items
- New product introductions with lower initial margins
- Phase-out of high-margin legacy products
-
One-Time Costs:
- Legal settlements or fines
- Restructuring charges
- Asset write-downs
-
Economic Factors:
- Inflation increasing all costs
- Currency fluctuations affecting imported materials
- Regulatory changes increasing compliance costs
How to diagnose:
- Perform a vertical analysis of your income statement
- Calculate margin by product/service line
- Compare current period to historical trends
- Benchmark against industry peers
How does net profit margin differ for service businesses vs product businesses?
The calculation is the same, but the components differ significantly:
Product-Based Businesses:
- COGS Typically Higher: Includes materials, manufacturing labor, packaging
- Inventory Management Critical: Carrying costs and obsolescence risk
- Economies of Scale: Margins often improve with volume due to fixed cost absorption
- Typical Margins: 5-15% for manufacturers, 2-8% for retailers
Service-Based Businesses:
- COGS is Labor-Centric: Primarily consists of service delivery labor
- No Inventory: Eliminates carrying costs and obsolescence risk
- Scalability Challenges: Often need to add staff proportionally to revenue
- Typical Margins: 10-30% for professional services, 5-20% for labor-intensive services
Key Differences in Financial Statements:
| Aspect | Product Business | Service Business |
|---|---|---|
| Primary COGS Components | Materials, manufacturing labor, packaging | Service delivery labor, subcontractor costs |
| Inventory Line Item | Significant (raw materials, WIP, finished goods) | None or minimal |
| Fixed vs Variable Costs | More fixed costs (factory, equipment) | More variable costs (labor scales with revenue) |
| Capital Intensity | High (equipment, facilities) | Low (primarily people and systems) |
| Typical Break-Even Point | Higher (due to fixed cost base) | Lower (more variable cost structure) |
Hybrid businesses (like restaurants or contractors) have characteristics of both models.
Can net profit margin be negative? What does that mean?
Yes, net profit margin can be negative, which means your business is operating at a loss. This occurs when total expenses exceed total revenue.
Common causes of negative margins:
- Startup Phase: New businesses often have negative margins initially as they invest in growth
- High Fixed Costs: Businesses with significant overhead may show losses at lower revenue levels
- Pricing Issues: Selling below cost (common in competitive markets or during promotions)
- Cost Overruns: Unexpected expenses or poor cost control
- Economic Downturns: Revenue drops while some costs remain fixed
- One-Time Events: Large non-recurring expenses (lawsuits, write-downs)
How to interpret negative margins:
- -5% to 0%: Concerning but manageable with quick action
- -10% to -5%: Serious issue requiring immediate cost cutting or revenue increases
- Below -10%: Existential threat – may require restructuring or additional funding
What to do if your margin is negative:
- Identify the root cause (revenue problem, cost problem, or both)
- Create a 90-day turnaround plan with specific targets
- Prioritize cash flow management to avoid liquidity crises
- Consider strategic pivots if core business model is unprofitable
- Seek professional advice (accountant, business consultant)
Note: Some businesses (like Amazon in its early years) intentionally operate with negative margins during growth phases, but this requires access to capital and a clear path to future profitability.
How does depreciation affect net profit margin?
Depreciation has a significant but often misunderstood impact on net profit margin:
Direct Impact:
- Depreciation is an operating expense that reduces net income
- Higher depreciation → Lower net income → Lower net profit margin
- Example: $100K depreciation on $1M revenue with 10% margin reduces margin to 9%
Indirect Effects:
- Tax Benefits: Depreciation reduces taxable income, saving cash (though not improving reported margin)
- Asset Intensity: Capital-intensive businesses (manufacturing) have higher depreciation than service businesses
- Growth Phase: Rapidly expanding companies show higher depreciation as they invest in assets
Accounting Method Differences:
| Aspect | Straight-Line Depreciation | Accelerated Depreciation |
|---|---|---|
| Early Years Impact | Moderate reduction in net income | Significant reduction in net income |
| Later Years Impact | Consistent reduction | Smaller reduction as asset ages |
| Cash Flow Impact | Moderate tax savings | Higher tax savings early |
| Reported Margins | More stable over time | More volatile (lower early, higher later) |
Key Considerations:
- Depreciation is a non-cash expense – it doesn’t affect actual cash flow
- Compare margins both with and without depreciation for different insights
- Industries with high depreciation (manufacturing, airlines) naturally have lower reported margins
- When analyzing businesses, look at EBITDA margin (before depreciation) for better comparability
Example Calculation:
Revenue: $1,000,000
COGS: $600,000
Operating Expenses (excluding depreciation): $250,000
Depreciation: $50,000
Without Depreciation:
Operating Income: $150,000 ($1M - $600K - $250K)
Net Margin: 15%
With Depreciation:
Operating Income: $100,000 ($150K - $50K)
Net Margin: 10%