Markup and Margin Calculator
Calculate the selling price from a markup or a target margin, and understand the difference between them.
Results
Selling price (excl. VAT)
The price that actually represents your revenue. —
Profit per unit
Selling price minus cost. —
Markup
The amount added to cost, expressed as a percentage of cost. Formula: (price − cost) / cost. —
Margin (gross profit margin)
The same amount, expressed as a percentage of the selling price. Formula: (price − cost) / price. Margin is always lower than markup: a 25% markup = a 20% margin. Confusing the two is one of the most common pricing mistakes. —
Markup → margin
| Markup | Margin |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 25% | 20% |
| 33.3% | 25% |
| 50% | 33.3% |
| 100% | 50% |
Glossary of terms
- Unit cost
- The cost of purchasing or producing one unit (excluding VAT).
- Markup
- The amount added to cost, expressed as a percentage of cost. Formula: (price − cost) / cost.
- Margin (gross profit margin)
- The same amount, expressed as a percentage of the selling price. Formula: (price − cost) / price. Margin is always lower than markup: a 25% markup = a 20% margin. Confusing the two is one of the most common pricing mistakes.
- Selling price (excl. VAT)
- The price that actually represents your revenue.
- Profit per unit
- Selling price minus cost.
- VAT (18%)
- Value added tax, which is added to the price and paid to the state budget. Applies only to businesses registered as VAT payers.
- Selling price incl. VAT
- The price the buyer pays.
Results are indicative and do not constitute financial advice.