---
title: How Profit Is Calculated in Sales Reports
description: Learn how the Profit column in Pabau sales reports is calculated (Item Net minus cost price), where to set cost prices for products and services, and why some lines show 0.
---

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# How Profit Is Calculated in Sales Reports

## In this article, we will show you how to read the Profit column in your sales reports: how it is calculated, where the cost price comes from, and why some lines show 0.

**NOTE:** This applies to the **Profit** column in line-item sales reports, such as the **Line item history** report in **Analytics**. Profit is not shown by default, so add it as a column if you can't see it. Profit can be sorted and exported, but it isn't available as a filter.

#### **How is Profit calculated?**

Profit is worked out for each line on an invoice:

**Profit = Item Net − Cost price**

- **Item Net** is the line amount after discounts and before tax. It's the same figure you see in the **Item Net** column.
- **Cost price** is the cost price saved on the product or service that was sold. Tax is not added to it or taken away from it.

For example, if a service is priced at £100 before tax, you give a £10 discount, and its cost price is £35, then Item Net is £90 and Profit is £55. Any tax charged on top doesn't change the Profit.

*Where this comes from:* Profit ← Item Net on the sale line, minus the **Cost price** ← the product or service record ← set under **Pricing** when you create or edit the product or service.

**IMPORTANT:** Profit uses the cost price saved on the product or service **now**, not the cost price at the time of the sale. If you change a cost price, Profit changes for past sales too the next time you run the report. Profit also takes the cost price once per line, so it is not multiplied by the line's **Qty**.

#### **Which items have a Profit?**

- **Products** (retail, injectables and consumables): Item Net minus the product's cost price.
- **Services**: Item Net minus the service's cost price.
- **Packages, gift cards and account top-ups**: always 0. These don't have a cost price of their own.

#### **Why do my services show 0 profit?**

Earlier versions of the report only calculated profit for retail products, so every service line showed 0. Profit is now calculated for services as well. Because Profit is worked out each time you run the report, this applies to past sales too.

If a line still shows 0, check the following:

1. **Item Category**: add the **Item Category** column. Package and gift card lines always show 0.
2. **Item Net**: if the line was fully discounted, Item Net is 0, so Profit is 0 minus the cost price.
3. **The line is still linked to a product or service**: a line with no linked product or service shows 0.

If a service has no cost price, its Profit equals its Item Net. To see a real margin, add a cost price to the service.

#### **Where do I set the cost price?**

#### **Step 1: Set the Cost Price on a Service**

1. Go to **Setup → Services** and open the service.

![Screenshot - 2026-10-14T091040.245](https://support.pabau.com/hs-fs/hubfs/Analytics%20Article%20Category/Screenshot%20-%202026-10-14T091040.245.png?width=623&height=276&name=Screenshot%20-%202026-10-14T091040.245.png)

 Once you open the service, select the **Pricing** tab. Enter the amount in **Cost price**. The field is marked **Optional**, and the cost price is never shown to clients. After that, save the service.

![Edit Service screen, Pricing tab, showing the Cost price field marked Optional](https://support.pabau.com/hubfs/kb/sales-report-profit/sales-report-profit-profit-1.png)

*The Pricing tab of a service, with Cost price (Optional) beside Default price.*

#### **Step 2: Set the Cost Price on a Product**

 Open the product from your products list. Then, select the **Pricing** tab and enter the amount in **Cost price**.  Once done, save the product.

![Edit Product screen, Pricing tab, showing Cost price and Retail price](https://support.pabau.com/hubfs/kb/sales-report-profit/sales-report-profit-profit-2.png)

*The Pricing tab of a product, with Cost price beside Retail price.*

**TIP:** To check what a line was costed at, add the **Product Cost** column next to **Profit**. It shows the cost price currently saved on the product or service.

#### **Related articles**

- [Pabau Analytics Glossary](https://support.pabau.com/en/pabau2/pabau-analytics-glossary?hsLang=en)
- [How to Generate the Line Item History Report](https://support.pabau.com/en/pabau2/how-to-generate-the-line-item-history-report?hsLang=en)
- [How to Use Filters in the Line Item History Report](https://support.pabau.com/en/pabau2/how-to-use-filters-in-the-line-item-history-report?hsLang=en)
- [How to Set Up Service Pricing](https://support.pabau.com/en/pabau2/how-to-set-up-service-pricing-in-pabau?hsLang=en)
- [How to Set Up Product Pricing](https://support.pabau.com/en/pabau2/how-to-set-up-product-pricing?hsLang=en)

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