Profit margin calculator
Gross profit margin from cost and price, the price that gives the margin you want, or the most you can pay for stock.
Markup calculator
Selling price from cost and markup, the markup you are charging, or the most you can pay, with the margin every answer leaves.
- Choose what to work out
- Fill in the two figures you know
- Read the margin it leaves, and the price with VAT
Example figures. Put in yours.
Selling price Your markup Most you can pay
- Profit on each
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- Margin
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- Markup
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- Price with VAT
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- Break-even ROAS
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The calculator needs JavaScript. The formula is below if you would rather work it out by hand.
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This markup calculator works three ways. Give it your cost and the markup you want, and it gives the selling price. Give it a cost and a price, and it tells you the markup you are charging. Or give it a price and a markup, and it tells you the most you can pay for the stock.
Every answer shows the margin it leaves, because that is the number that pays the bills. Under More options it adds Irish or UK VAT to the price for you.
How to calculate markup (the markup formula)
Markup is the profit on a sale as a share of what the thing cost you.
| To find | Formula | Example |
|---|---|---|
| Selling price | Cost × (1 + markup) | €40 × 1.5 = €60 |
| Markup | (Price − cost) ÷ cost × 100 | (€60 − €40) ÷ €40 × 100 = 50% |
| Cost | Price ÷ (1 + markup) | €60 ÷ 1.5 = €40 |
So a 25% markup on €100 is €125, a 20% markup on €500 is €600, and a 50% markup on €50 is €75.
Markup vs margin
This is where most pricing mistakes start. Markup is measured on the cost. Margin is measured on the selling price. The same sale gives two different percentages, and the margin is always the smaller one.
| Markup | Margin |
|---|---|
| 20% | 16.7% |
| 25% | 20% |
| 30% | 23.1% |
| 50% | 33.3% |
| 100% | 50% |
| 200% | 66.7% |
Say you need a 30% margin and you add 30% to the cost. You get a 23.1% margin instead, and you won’t notice until the year-end figures. If you think in margins, the profit margin calculator works the other way round.
Our guide to markup vs margin has the full conversion chart, both ways.
How to calculate selling price using a markup percentage
Turn the markup into a multiplier and multiply the cost by it. A 30% markup is × 1.3. A 75% markup is × 1.75. A 100% markup doubles the cost.
The calculator’s table does this for the common markups at once, with the margin each one leaves, so you can see where your price sits.
Adding VAT in the markup calculator
Work out the markup on prices before VAT, then add VAT on top. VAT isn’t profit, so a markup that includes it flatters the sale.
A €60 price becomes €73.80 with Irish VAT at 23%, or £72 with UK VAT at 20% on a £60 price. Under More options, pick the rate and the calculator shows the price with VAT beside everything else.
What markup do you need?
Enough to leave a margin that covers everything else: rent, wages, software, and the cost of winning the customer in the first place.
That last one is easy to forget. If you advertise, your margin sets the return on ad spend you need just to break even: a 33.3% margin needs a ROAS of 3. The calculator shows that figure with every answer, and the ROAS calculator takes it from there.
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How do you calculate a markup?
Take the cost away from the selling price, divide by the cost and multiply by 100. A product that costs €40 and sells for €60 has a markup of €20 ÷ €40 × 100, or 50%.
What is a 25% markup on $100?
$125. Multiply the cost by 1.25. The same works in any currency: a 25% markup on €100 is €125, and it leaves a margin of 20%.
What is a 30% markup?
Adding 30% of the cost to the cost. Something that costs €100 sells for €130, and the €30 profit is 23.1% of the selling price, so a 30% markup is a 23.1% margin.
What is a 50% markup on $50?
$75: half of $50 is $25, added to the $50. The margin on that sale is $25 ÷ $75, or 33.3%.
What is the difference between markup and margin?
Markup is profit as a share of the cost; margin is profit as a share of the selling price. The same sale gives two different percentages: a 50% markup is a 33.3% margin, and a 100% markup is a 50% margin. Mixing them up is the commonest way to underprice.
Is a 20% profit margin bad?
It depends on what the margin has to pay for. A 20% gross margin leaves little for rent, wages and marketing, and if you advertise it needs a return on ad spend of 5 just to break even on the ads. The ROAS calculator shows what that means for your campaigns.
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