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Larger companiesProfit margin by size
What do companies your size keep as profit? IRS figures, by size and by industry
The short answer: S corporations with $10,000,000 to $50,000,000 in sales reported 7.3% of what they took in as business profit on their 2023 tax returns, taken together. Add back interest, depreciation and amortization and it's about 9.1%. At $50,000,000 to $250,000,000 the same figures were 6.1% and 8.0%. That's BridgeBook's math on IRS Statistics of Income figures.[1]
Figures: IRS tax year 2023Census through June 2026Census 2022NYU Stern January 2026Read November 12, 2026
Data page
9 min read
Legend Atty · Founder, BridgeBook
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What do companies keep at each size?
- Business profit on tax returns, $10,000,000 to $50,000,000 in sales
- 7.3%[1]Tax year 2023
- Before interest, depreciation and amortization, same band
- 9.1%Tax year 2023, our math on IRS figures
- Business profit on tax returns, $50,000,000 to $250,000,000 in sales
- 6.1%Tax year 2023
- Before interest, depreciation and amortization, same band
- 8.0%Tax year 2023, our math on IRS figures
The first figure is what S corporations this size reported to the IRS as business profit, as a share of what they took in, before the owners' own income tax. An S corporation passes its profit to its owners' returns, so the company itself usually pays no federal income tax on it. The second figure adds back interest, depreciation and amortization, by our math on IRS figures. That's the closest the IRS tables come to EBITDA: yearly profit before interest, taxes, depreciation and amortization.
Each row is S corporations in this band, taken together: all their profit over all their receipts. It isn't the middle company. The IRS sorts the rows by business receipts, which this page calls sales. A company with exactly $50,000,000 in sales falls in the $50,000,000 to $250,000,000 row.
$1,000,000 to $2,500,000
$2,500,000 to $5,000,000
$5,000,000 to $10,000,000
$10,000,000 to $50,000,000
$50,000,000 to $250,000,000
$250,000,000 or more
All S corporations
Profit as a share of sales, by size of sales
Band is sales| Sales | Business profit on tax returns | Before interest, depreciation and amortization |
|---|---|---|
| $1,000,000 to $2,500,000 | 9.0% | 11.6% |
| $2,500,000 to $5,000,000 | 8.4% | 10.7% |
| $5,000,000 to $10,000,000 | 8.1% | 10.0% |
| $10,000,000 to $50,000,000 | 7.3% | 9.1% |
| $50,000,000 to $250,000,000 | 6.1% | 8.0% |
| $250,000,000 or more | 5.9% | 8.2% |
| All S corporations | 7.5% | 9.7% |
Sorted by business receipts, which this page calls sales. Before interest, depreciation and amortization = (business profit + interest + depreciation + amortization − net gains on selling equipment) ÷ total receipts, by our math on IRS figures.[1]
Source: IRS Statistics of Income, Tax Year 2023, released September 2026[1]. Download the table (CSV).
Read across the table and the margin slips as companies grow. It's 9.0% at $1,000,000 to $2,500,000 in sales, 7.3% at $10,000,000 to $50,000,000 and 6.1% at $50,000,000 to $250,000,000. The next chapter is about why. This page stops at profit and puts no price on a company. What a margin sells for is on the revenue-to-value tool.
How to cite this page
BridgeBook, "Average Profit Margin by Company Size," https://bridgebook.io/blog/profit-margin-by-company-size, figures from IRS Statistics of Income, Tax Year 2023, read November 12, 2026.
Why do bigger S corporations run thinner margins?
Partly because of what they sell, as far as these tables can show. Gross margin is sales less the cost of goods sold, as a share of sales. It drops hard with size: 38.5% at $10,000,000 to $50,000,000 and 28.1% at $50,000,000 to $250,000,000.[1] A company that resells goods has a high cost of goods and a thin margin, even when it's run well.
The Census count of companies fits that reading. Among U.S. employer firms with $10,000,000 to $99,999,999 in sales, wholesale is the biggest sector.[5] Distributors and dealers resell what others make, so their margins run thin. That's our reading of the mix, not a cause the IRS tables give.
Gross margin, owners' pay and how many, by size of sales
Band is sales| Yearly sales | Gross margin | Officers' pay, share of sales | Average sales | S corporations |
|---|---|---|---|---|
| $1,000,000 to $2,500,000 | 64.8% | 6.6% | $1,572,464 | 646,684 |
| $2,500,000 to $5,000,000 | 55.8% | 4.6% | $3,441,183 | 266,264 |
| $5,000,000 to $10,000,000 | 46.7% | 3.2% | $6,929,498 | 143,226 |
| $10,000,000 to $50,000,000 | 38.5% | 2.3% | $20,088,935 | 119,562 |
| $50,000,000 to $250,000,000 | 28.1% | 1.1% | $94,842,918 | 22,295 |
| $250,000,000 or more | 24.3% | 0.6% | $715,078,611 | 3,073 |
| All S corporations | 41.6% | 3.2% | $1,946,363 | 5,440,879 |
Sorted by business receipts, which this page calls sales. Before interest, depreciation and amortization = (business profit + interest + depreciation + amortization − net gains on selling equipment) ÷ total receipts, by our math on IRS figures.[1]
Source: IRS Statistics of Income, Tax Year 2023, released September 2026[1].
How is a tax-return margin different from EBITDA?
A tax return is filed to pay the right tax, and a buyer reads it to price the company. Those aren't the same job, so the numbers move. A buyer starts from the books and adjusts them. Adjusted EBITDA is that rebuilt profit, after owner pay is set to a market salary and one-time costs come out.
Owner pay is the biggest line. In the $10,000,000 to $50,000,000 band, officers' pay was 2.3%[1] of receipts, about $474,886 a return. If yours is above what you'd pay someone to do your job, the excess goes back into profit. If it's below, a buyer takes the gap out.
Rent paid to a building you own gets set to market rent. Costs that won't happen again come out. Books kept on a cash basis get moved to accrual, which counts sales and costs when they're earned, not when cash moves.
One more gap sits on the tax form itself. The IRS's instructions for the S corporation return say this about the profit line:
"Don't include any section 179 expense deduction on this line. This amount isn't deducted by the corporation."[8]
Section 179 lets owners write off equipment in the year it's bought. That write-off shows up on the owners' own returns, so the profit in these tables comes before it. More on the two earnings figures buyers use is in SDE vs. EBITDA.
What's the margin in my industry?
Your industry moves your margin more than your size does. Wholesale S corporations reported 5.2%[2] as business profit; manufacturers reported 9.0%. These rows cover every size of company in the industry, so read them beside the size rows, not instead of them.
Profit as a share of sales, by industry, every size together
Band is sales| Industry | Business profit on tax returns | Before interest, depreciation and amortization | S corporations |
|---|---|---|---|
| Construction all sizes | 6.7% | 8.4% | 712,091 |
| Construction of buildings all sizes | 4.8% | 5.9%* | 225,007 |
| Heavy and civil engineering construction and land subdivision all sizes | 7.4% | 11.1%* | 30,607 |
| Specialty trade contractors all sizes | 8.0% | 10.4%* | 456,477 |
| Manufacturing all sizes | 9.0% | 11.7% | 163,345 |
| Food manufacturing all sizes | 5.7% | 8.4%* | 15,041 |
| Fabricated metal product manufacturing all sizes | 10.9% | 13.9%* | 32,261 |
| Machinery manufacturing all sizes | 11.0% | 14.2%* | 12,642 |
| Wholesale trade all sizes | 5.2% | 6.4% | 247,952 |
| Wholesale trade, durable goods all sizes | 6.1% | 8.0%* | 147,539 |
| Wholesale trade, nondurable goods all sizes | 4.0% | 5.0%* | 91,412 |
| Retail trade all sizes | 3.7% | 5.0% | 439,452 |
| Truck transportation all sizes | 2.9% | 8.3% | 199,157 |
| Administrative and support services all sizes | 7.6% | 9.8%* | 238,112 |
| Waste management and remediation services all sizes | 6.5% | 12.4%* | 14,415 |
* Includes gains on selling equipment, which the IRS doesn't publish for this industry.
Sorted by business receipts, which this page calls sales. Before interest, depreciation and amortization = (business profit + interest + depreciation + amortization − net gains on selling equipment) ÷ total receipts, by our math on IRS figures.[2]
Source: IRS Statistics of Income, Tax Year 2023[2]. Download the table (CSV).
Some industries aren't on the list, on purpose:
- Professional, scientific and technical services; offices of health practitioners. Those IRS rows are mostly small practices, so they'd overstate what a larger firm keeps.
- Computer and electronic products; plastics. The IRS withholds the lines the margin needs.
- C corporation and all-corporation net margins. They include foreign income that isn't in receipts, so they aren't a margin on sales.
What do manufacturers earn by size today?
The Census Bureau's Quarterly Financial Report splits manufacturers by size, with data to June 2026. It sorts them by total assets, not sales, and counts public and private companies together. Operating profit is profit from running the business, before interest and taxes. The last column adds back depreciation and amortization.
Manufacturers' operating profit, by total assets, four quarters to June 2026
Band is total assets| Total assets | Operating profit, share of sales | Plus depreciation and amortization |
|---|---|---|
| $5,000,000 to $10,000,000 | 7.9% | 10.3% |
| $10,000,000 to $25,000,000 | 7.3% | 10.0% |
| $25,000,000 to $50,000,000 | 6.4% | 9.2% |
| $50,000,000 to $100,000,000 | 6.5% | 9.3% |
| $100,000,000 to $250,000,000 | 5.6% | 8.9% |
| $250,000,000 to $1,000,000,000 | 6.2% | 9.6% |
Source: U.S. Census Bureau, Third quarter 2025 to second quarter 2026, released September 8, 2026[3].
Assets aren't sales, but they track. In tax year 2023, S corporations with $10,000,000 to $25,000,000 of total assets averaged $28,404,444[4] in sales, and those with $25,000,000 to $50,000,000 averaged $59,931,605. So assets of $10,000,000 to $50,000,000 are roughly the $30,000,000 to $60,000,000 company. Those figures cover every industry, not only manufacturers.
Inside manufacturing, the margin slips with size too. Operating profit is 7.9% in the smallest asset band and 5.6% to 6.5% from $50,000,000 of assets up. Add back depreciation and amortization and the bands sit closer together, from 8.9% to 10.3%.[3]
What do public companies earn?
More, and it's a different kind of company. Aswath Damodaran at NYU Stern tracks public U.S. companies. Across 4,822 of them, financial firms left out, EBITDA came to 17.4%[7] of sales, with data as of January 2026. These are much larger businesses, so they're here as an outside reference, not a target for yours.
Public U.S. companies, EBITDA as a share of sales
| Public companies | EBITDA, share of sales |
|---|---|
| All public companies, financial firms left out | 17.4% |
| Machinery | 19.6% |
| Building materials | 17.3% |
| Engineering and construction | 8.0% |
| Food processing | 15.3% |
| Food wholesalers | 3.7% |
| Distributors | 11.4% |
| Trucking | 15.6% |
| Environmental and waste services | 21.0% |
Source: Aswath Damodaran, NYU Stern, Data as of January 2026[7].
How many companies are this size?
The Census Bureau counted 249,587[5] U.S. employer firms with $10,000,000 to $99,999,999 in sales in 2022. That's 3.9% of all 6,395,635 employer firms. 216,449 had $10,000,000 to $49,999,999 in sales, and 33,138 had $50,000,000 to $99,999,999.
By sector, the same band in 2022:
| Sector | Employer firms |
|---|---|
| Wholesale trade | 44,106 |
| Retail trade | 37,825 |
| Construction | 36,962 |
| Manufacturing | 28,622 |
| Professional, scientific and technical services | 23,545 |
| Health care and social assistance | 21,630 |
| Administrative, support and waste services | 11,794 |
| Transportation and warehousing | 9,738 |
A firm with work in more than one industry can be counted in more than one sector.[5]
The IRS counts something else: tax returns. It had 201,968[6] corporations of every form with $10,000,000 to $100,000,000 in sales for tax year 2023. That's corporations only, and the Census figure is employer firms of every kind, so the two don't add or compare.
What these figures are, and aren't
They're the IRS's totals for S corporation tax returns in each band, and the newest year is 2023. Read them with these limits:
- These are tax returns, not audited statements, and profit on a tax return can differ from the profit an owner would show a buyer.
- Each figure is every company in the band added together, loss-makers included, so it isn't the middle company, and a well-run company should beat it.
- Only S corporations are counted. Partnerships, LLCs taxed as partnerships and C corporations aren't in these rows.
- The bands are $10,000,000 to $50,000,000 and $50,000,000 to $250,000,000 in sales; the IRS doesn't split them further.
- The industry figures cover every size of company in that industry. The IRS stopped publishing industry and size together after tax year 2013.
- Tax Year 2023 is the newest year the IRS has released (September 2026).
- The figure before interest, depreciation and amortization comes before the adjustments a sale uses: owner pay above or below a market salary, one-time costs, related-party rent, and books moved from tax basis to accrual.
- Public companies' margins are shown only as an outside reference; they're much larger businesses.
- The profit line comes before any section 179 equipment write-off, which S corporation owners take on their own returns (IRS Instructions for Form 1120-S, 2023, line 14).
- The size rows leave out gains on selling equipment. Some industry rows include them, because the IRS doesn't publish the line, and those rows say so.
How do I compare my own margin?
Take your last full year. Start from profit on your tax return or your income statement, then add back interest, depreciation and amortization. Divide by sales. Set it beside your industry's row in Exhibit 3, then your size row in Exhibit 1.
A made-up example: a company with $20,000,000 in sales, at three margins. The middle one is its size band's figure.
| Margin before interest, depreciation and amortization | Profit on $20,000,000 in sales |
|---|---|
| 6.1% | $1,220,000 |
| 9.1% (the band's figure) | $1,820,000 |
| 12.1% | $2,420,000 |
Three points of margin on $20,000,000 is $600,000 a year of profit. A buyer prices that profit, not the sales. See what each is worth.
What we'd look at first
When an owner sends us their numbers, a dedicated advisor starts from the last two or three tax returns and the monthly books, not from this table. Your advisor rebuilds profit the way a buyer will, line by line:
- What each owner is paid, set beside a market salary for the job they do.
- Costs that won't happen again, like a lawsuit, a move or a one-time project.
- Rent paid to a building the owners hold, set to market rent.
- Whether the books are on a cash or accrual basis, and what changes when they move.
Then that rebuilt margin goes beside your industry's row. A gap of a few points either way is where the first conversation starts. Why bigger companies get paid more for each dollar of profit is in why bigger companies sell for more.
Questions owners ask about margins
What is the average profit margin for a $10,000,000 company?
S corporations with $10,000,000 to $50,000,000 in sales reported 7.3% as business profit in tax year 2023, taken together, by our math on IRS figures. Before interest, depreciation and amortization it was about 9.1%.
What is a good EBITDA margin for a company with $20,000,000 in sales?
One above the band's figure. The IRS figure includes companies that lost money, so it's a floor for a well-run company, not a target. Your industry matters more than your size.
Why do larger companies show lower margins?
Gross margin falls with size in these tables, from 38.5% at $10,000,000 to $50,000,000 in sales to 28.1% at $50,000,000 to $250,000,000. That fits a mix with more distributors, dealers and manufacturers, which run thinner margins. The IRS tables don't give the cause; that's our reading of the mix.
Are these EBITDA margins?
No. The IRS doesn't publish EBITDA. We add back the interest, depreciation and amortization the IRS reports, and leave out gains on selling equipment where the IRS shows them. A buyer's adjusted EBITDA will differ.
How current are these figures?
Tax year 2023 is the newest the IRS has released (September 2026). The Census manufacturing figures run to June 2026.
Where these numbers come from
- IRS Statistics of Income, Corporation Income Tax Returns Complete Report (Publication 16), Table 3.2, Form 1120-S by size of business receipts. Tax Year 2023, released September 2026. Read November 12, 2026.
- IRS Statistics of Income, Corporation Income Tax Returns Complete Report (Publication 16), Table 6.1, Form 1120-S by major industry. Tax Year 2023. Read November 12, 2026.
- U.S. Census Bureau, Quarterly Financial Report, Second Quarter 2026, financial tables. Third quarter 2025 to second quarter 2026, released September 8, 2026. Read November 12, 2026.
- IRS Statistics of Income, Corporation Income Tax Returns Complete Report (Publication 16), Table 2.4, by size of total assets. Tax Year 2023. Read November 12, 2026.
- U.S. Census Bureau, Statistics of U.S. Businesses 2022, by enterprise receipts size. 2022, released April 10, 2025. Read November 12, 2026.
- IRS Statistics of Income, Corporation Income Tax Returns Complete Report (Publication 16), Table 3.1, all active corporations by size of business receipts. Tax Year 2023. Read November 12, 2026.
- Aswath Damodaran, NYU Stern, Operating and Net Margins, Margins by Sector (US). Data as of January 2026. Read November 12, 2026.
- IRS, Instructions for Form 1120-S (2023), line 14. 2023. Read November 12, 2026.
Percentages are BridgeBook's arithmetic on the IRS dollar figures.
Outside figures are other publishers', named and dated, and they don't feed our calculator. How we use outside figures
Keep reading
- Larger companiesWhy Bigger Companies Sell for MoreWhat outside reports show about price and size, and why their figures sit above the sold-deal data we use.
- Larger companiesWhat a $20,000,000 Company Is WorthWhy margin moves your price more than the multiple, and which costs a buyer will count.
- What it's worthSDE vs. EBITDAThe two ways buyers measure earnings, which one fits your business, and which add-backs count.
- SellingHow to sell a businessThe steps from a first valuation to closing day, and what to get ready before buyers look.
- Larger companiesWhat a $10,000,000 Company Is WorthWhen buyers stop counting your pay as profit, and who can buy a company this size.
- Larger companiesWhat a $30,000,000 Company Is WorthWhy the team that runs your company matters as much as its profit when buyers set a price.
One important decision. Two good places to start.
Put a number on your margin
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