Explain it like I’m 5
You buy something for $50 and later sell it for $62.50. You made $12.50 — that’s your profit. Shares of a company work exactly the same way, just with more of them.
Two things can eat into that profit: fees the app or broker charges to buy and sell, and tax on what you made. Keep the shares for more than a year, and the tax is usually smaller.
This calculator does the math for you: how much you made, what percentage that is, how much tax you might owe, and the price you need to sell at just to break even.
Words you’ll see, in plain English
- Stock / share
- A tiny piece of a company. Own one share of a company with a million shares, and you own one-millionth of it.
- Return / ROI
- How much you made compared with how much you put in, shown as a percentage. Put in $100, get back $125: a 25% return.
- Capital gain
- The profit when you sell something for more than you paid. Buy for $100, sell for $150: a $50 capital gain.
- Short-term vs. long-term
- Held for one year or less = short-term (taxed like your paycheck). Held for more than a year = long-term (usually taxed less).
- Commission / trading fee
- What a broker charges you to buy or sell. Many US brokers now charge $0 for stock trades.
- Breakeven
- The price where you have made exactly zero — not a win, not a loss.
- Cost basis
- What you paid for something you invested in, including fees. It’s the starting line for working out your profit.
More money words explained simply in our glossary.
How to use the stock profit calculator
- Enter how many shares you bought, the price you paid and the price you sold (or plan to sell) at.
- Add any commissions. Many US brokers charge $0 for online stock trades, but some still charge fees.
- Choose how long you held the shares and your capital gains tax rate to estimate what you keep.
Stock profit formula
Profit = (sell price × shares − sell fees) − (buy price × shares + buy fees)
Return (%) = profit ÷ (buy price × shares + buy fees) × 100
Breakeven sell price = (total cost + sell fees) ÷ shares
Example
You buy 100 shares at $50.00 and sell them at $62.50, with no commissions. Your cost is $5,000 and your proceeds are $6,250, so your profit is $1,250 — a 25% return. If you held the shares for more than a year and are in the 15% long-term capital gains bracket, you would owe about $187.50 in federal tax and keep about $1,062.50.
Short-term vs. long-term capital gains
| Holding period | Type | Federal tax rate |
|---|---|---|
| 1 year or less | Short-term | Your ordinary income tax rate (10%–37%) |
| More than 1 year | Long-term | 0%, 15% or 20%, based on taxable income |
Holding a winning position for just over a year can noticeably cut the tax bill. States may tax capital gains too, and high earners can owe an extra 3.8% net investment income tax.
What this calculator doesn’t include
- Dividends received while you held the stock.
- State taxes and the net investment income tax (add them to the tax rate if they apply).
- Multiple purchases at different prices — use the stock average calculator to find your average cost first.
Frequently asked questions
How do you calculate profit on a stock?
Profit = (sell price × shares − sell commission) − (buy price × shares + buy commission). For example, buying 100 shares at $50 and selling at $62.50 with no fees makes (6,250 − 5,000) = $1,250.
How do you calculate the percentage return on a stock?
Divide the profit by the total amount you paid, including commissions, and multiply by 100. A $1,250 profit on a $5,000 purchase is a 25% return.
How are stock profits taxed?
In the US, profits on shares held more than one year are long-term capital gains, taxed at 0%, 15% or 20% depending on your taxable income. Shares held one year or less produce short-term gains, taxed at your ordinary income tax rate. Some high earners also owe the 3.8% net investment income tax. Gains inside an IRA or 401(k) are not taxed when you sell.
What if I sell at a loss?
A realized capital loss first offsets capital gains. If losses exceed gains, up to $3,000 a year ($1,500 if married filing separately) can offset ordinary income, and the rest carries forward. Be aware of the wash-sale rule: buying the same or a substantially identical security within 30 days before or after the sale disallows the loss for now.
Does this include dividends?
No. This calculator looks at the price change only. To project dividend income, use our dividend calculator.
These results are estimates for education only, based on the assumptions you enter. They are not financial, investment or tax advice. Real returns, rates and taxes vary. See our methodology anddisclaimer.