Margin calculator – calculate margin and markup
Calculate margin, markup, selling price and price including VAT from cost, sale price or a target margin.
Calculate margin
VAT rate options are examples only. Enter the VAT rate that applies to your situation; the calculator does not decide the correct rate.
What the margin calculator shows
The margin calculator helps compare cost price, selling price, margin and markup. You can calculate margin from a known cost and selling price, or estimate the selling price needed for a target margin.
How to use the calculator
Choose the calculation mode and enter the prices excluding VAT. If you want to see the VAT amount and the selling price including VAT, choose one of the VAT rate options or enter your own VAT rate.
Selling price, cost and margin
Margin is the difference between selling price and cost. Margin percentage compares that margin with the selling price, while markup compares the same margin with the cost price.
Calculation logic
- Margin = selling price excluding VAT - cost excluding VAT.
- Margin percentage = margin / selling price excluding VAT x 100.
- Markup = margin / cost excluding VAT x 100.
- Selling price from target margin = cost / (1 - target margin / 100).
- Selling price including VAT = selling price excluding VAT x (1 + VAT rate / 100).
Examples
- Cost 80 and selling price 100 gives margin 20, margin percentage 20% and markup 25%.
- If the cost is 80 and the target margin is 20%, the selling price excluding VAT is 100.
- With a selling price excluding VAT of 100 and a VAT rate of 25%, the price including VAT is 125.
Margin and markup
Margin and markup are easy to mix up because they use different bases. Margin percentage is calculated from selling price. Markup is calculated from cost. The same profit amount therefore gives different percentages.
Limitations and business scope
The margin calculator is an arithmetic pricing aid. It is not pricing, accounting, tax or business advice, and it does not automatically include all costs, taxes, discounts, shipping, returns, currencies, contract terms or company-specific margin targets.
FAQ
Are margin and markup the same thing?
No. Margin is compared with selling price, while markup is compared with cost.
How is margin calculated?
Margin is selling price minus cost. Margin percentage is margin divided by selling price.
Can the calculator find a price from a target margin?
Yes. Choose the target margin mode and enter cost plus target margin percentage. The calculator estimates the selling price excluding VAT and the price including VAT.
Does the calculator include every business cost?
No. It uses the values you enter and does not automatically include shipping, discounts, returns, overhead, fees, currency effects or other costs.
Why can target margin not be 100%?
Margin percentage is measured against selling price. At 100% or more, cost would have no meaningful share of the selling price.