Your Net Profit in TrueProfit is what you actually keep after every real cost of doing business, not just your sales. TrueProfit calculates it automatically from your Shopify orders and every connected cost source, so you never have to do the math by hand.
Net Profit = Revenue + Tips + Gift Card Sales − Total Costs
Total Costs = COGS + Shipping Costs + Handling Fees + Transaction Fees + Ad Spend + Custom Costs
The full Net Profit formula
Net Profit is the profit you keep after deducting all costs.
Net Profit = Revenue + Tips + Gift Card Sales − Total Costs (if Taxes Collected is excluded)
Net Profit = Revenue + Tips + Gift Card Sales − Taxes Collected − Total Costs (if Taxes Collected is included)
Whether Taxes Collected is included depends on your Calculation Preferences. By default, TrueProfit subtracts Taxes Collected (the second formula). If you don't want it subtracted from your Net Profit, change this in Calculation Preferences.
This metric is calculated from your Shopify Orders and all connected cost sources.
What each part means
Part | What it is | Where it comes from |
Revenue | Total Sales after discounts & returns, including tax & shipping charged. Equivalent to Shopify's Total Sales. Revenue = Gross Sales − Discounts − Returns + Taxes Collected + Shipping Charged | Shopify Orders |
COGS | Cost of the products you sold (unit cost × units sold) | Your COGS settings + Shopify |
Shipping Costs | What you paid carriers to fulfill orders (not what you charged customers) | Cost settings / synced |
Handling Fees | Per-order handling fee from your cost settings | Manually added from Custom Cost or COGS feature |
Transaction Fees | Fees from payment providers (Stripe, PayPal) and Shopify third-party payment fees | Synced from Shopify Payments, connected integrations, or manual configuration |
Ad Spend | Total ad spend across connected ad platforms | Connected ad platforms |
Custom Costs | Manual costs not auto-synced (software, rent, salaries, agency fees). Taxes Paid is recorded here. | Your Custom Costs setup |
Tips, Gift Card Sales | Added to what you keep. Gift card sales are not product revenue yet — revenue is recognized when customers use the gift card. | Shopify Orders |
Taxes Collected | Tax collected from customers. By default it is subtracted from Net Profit; toggle in Calculation Preferences. | Shopify Orders |
Net Profit vs Gross Profit
They're not the same. Gross Profit stops after product and direct order costs; Net Profit goes further and subtracts every cost.
Gross Profit — the profit after subtracting product and direct order costs from your sales:
Gross Profit = Revenue + Tips + Gift Card Sales − COGS − Shipping Costs − Transaction Fees − Handling Fees
Net Profit — the profit you keep after deducting all costs:
Net Profit = Revenue + Tips + Gift Card Sales − Total Costs (if Taxes Collected is excluded)
Net Profit = Revenue + Tips + Gift Card Sales − Taxes Collected − Total Costs (if Taxes Collected is included)
The difference: Gross Profit covers only COGS, shipping, transaction, and handling. Net Profit also subtracts Ad Spend, Custom Costs, and by default — Taxes Collected.
Why net profit per product can differ from your dashboard
Your store-level Net Profit (Dashboard) includes store-wide items like Tips, Gift Card Sales, and Custom Costs. Your per-product Net Profit (Product Analytics) is narrower, it covers each product's own costs (COGS + Shipping + Handling + Transaction Fee + Ad Spend) and doesn't carry store-wide items. That's why the two can look different, both are correct at their own level. See Product Analytics Metric Glossary.
Why your net profit looks lower than Shopify's number
Shopify's headline figure is sales, not profit. TrueProfit subtracts the real costs Shopify doesn't track — COGS, shipping, ad spend, transaction fees, and custom costs — so you see what you actually keep. See Understanding your TrueProfit numbers vs Shopify.
Common Questions
How does TrueProfit calculate net profit?
Net Profit = Revenue + Tips + Gift Card Sales − Total Costs, where Total Costs = COGS + Shipping Costs + Handling Fees + Transaction Fees + Ad Spend + Custom Costs. It's calculated automatically from your Shopify orders and connected cost sources.
What's included in the net profit formula?
Every real cost: product cost (COGS), shipping you pay, handling fees, payment/transaction fees, ad spend, and custom costs (which includes Taxes Paid). Tips and gift card sales are added in.
Does TrueProfit subtract ad spend from net profit?
Yes. Ad spend from all connected ad platforms is part of Total Costs, so Net Profit is your profit after ads.
Does TrueProfit subtract the tax I collect from customers from my net profit?
By default, yes — TrueProfit subtracts Taxes Collected. If you don't want it subtracted, change this in Calculation Preferences.
What's the difference between net profit and gross profit?
Gross Profit subtracts only product and direct order costs (COGS, shipping, transaction, handling). Net Profit goes further — it also subtracts Ad Spend, Custom Costs, and (by default) Taxes Collected, so it reflects everything you actually keep.
Why is my net profit lower than my Shopify sales?
Because sales aren't profit. TrueProfit subtracts the real costs Shopify's sales figure doesn't include.