Skip to the tool
Priostack Apps

Margin and markup calculator

Two values are enough: cost, price, profit, margin or markup. The calculator works out the rest.

Margin calculator

What one item costs you, including delivery and other buying costs. If you are not VAT-registered, include the VAT you paid, as you cannot reclaim it.

£

£

The shelf price. The VAT rate below is used to work out the price excluding VAT.

£

Selling price minus cost, excluding VAT. Negative if you sell at a loss.

£

Profit ÷ selling price × 100, which HMRC calls the gross profit rate. Not the same as markup, which is worked out on the cost.

%

Profit ÷ cost × 100, which HMRC calls the rate of mark-up. Not the same as gross margin, which is worked out on the selling price.

%

Selling price ÷ cost price, both excluding VAT.

Price including VAT ÷ cost price excluding VAT: the shelf price is cost × this multiplier.

VAT on the selling price

Adds VAT to the selling price, or takes it out of a price or multiplier incl. VAT that you enter. Margins are always worked out excluding VAT.

Selling price (excl. VAT)

—

Fill in any two values, at least one of them an amount, to see the rest.

Cost price
—
Selling price (excl. VAT)
—
Gross profit
—
Gross margin (profit ÷ selling price)
—
Markup (profit ÷ cost)
—
Multiplier (excl. VAT)
—
Multiplier incl. VAT
—
VAT rate used
—
VAT on the selling price
—
Selling price (incl. VAT)
—

Gross margin or markup?

Both compare the same profit with a different base. Gross margin = profit ÷ selling price × 100. Markup = profit ÷ cost × 100. An item bought for £60 and sold for £100 makes £40: a 40% gross margin and a 66.67% markup. With a profit, the gross margin is always the smaller of the two.

Recent calculations

Nothing yet: copy, export or save a calculation to find it here.

Related apps

  • VAT calculator

    Add VAT to a net price or take it out of a gross price at the UK standard, reduced or zero rate, or any rate. Rounded to the penny, with workings.

  • Invoice and quote generator

    Create invoices and quotes to print as PDFs: VAT by rate, due dates, and a check of what UK invoices and VAT invoices must show.

  • Pricing calculator

    Work out a selling price from your costs and a target margin or markup, with fixed costs, UK VAT and price endings such as .99. Every step shown.

  • Break-even calculator

    Work out your break-even point in units and sales from fixed costs, price and variable costs, with contribution margin, margin of safety and workings.

See all 12 apps in Pricing and ecommerce

How it works

Fill in any two values, at least one of them an amount: cost and selling price, cost and markup, price and margin, and so on. You get the gross profit, the gross margin, the markup, the multiplier and the price including VAT. A single percentage on its own converts a margin into a markup, or a markup into a margin.

Fill in any two values

Enter any two values, at least one of them an amount: cost, selling price excluding or including VAT, gross profit, gross margin, markup or multiplier. The others appear straight away, with the workings. A single percentage or multiplier on its own is converted into the other rates. To start from a different pair, clear one of the two fields or press Reset.

Margin or markup?

Both compare the same profit with a different base. Gross margin divides the profit by the selling price; markup divides it by the cost. An item bought for £100 and sold for £150 makes £50: a 33.33% margin and a 50% markup. As HMRC's own guidance warns, 'margin' can mean either, so always say which one you mean.

Leave VAT out

Work out margins on prices excluding VAT: if you are VAT-registered, the VAT you charge is passed on to HMRC. The VAT rate you pick takes you between prices excluding and including VAT: it gives the VAT, the price your customer pays and the multiplier including VAT, and takes the VAT out of a price or multiplier including VAT that you enter. If you are not VAT-registered, you cannot reclaim the VAT you pay on what you buy, so count it in your cost and choose 'No VAT'. For any other rate, choose 'Other' and type it in.

Use the full cost

Include everything it takes to buy the item, such as delivery and import costs, so that the margin shows what you actually keep.

Rounding and reusing the result

Amounts are rounded to the nearest penny, with halves rounded up. If you enter a rate or a multiplier, the other rates are converted from it exactly; if you enter two amounts, the rates are worked out from the amounts shown, so you can check every line of the workings by hand. Copy the result, export it as a CSV file or save it to Priostack; whatever you copy, export or save is also kept on this device, under 'Recent calculations'.

Gross profit = selling price − cost.

Gross margin = profit ÷ selling price × 100.

Markup = profit ÷ cost × 100.

Multiplier = selling price ÷ cost.

Conversions (HMRC Enquiry Manual EM3503): margin = markup ÷ (markup + 100) × 100; markup = margin ÷ (100 − margin) × 100.

Example: pricing for a 25% margin

An item costs £60.00 and you want a 25% gross margin: enter 60 in 'Cost price (excl. VAT)' and 25 in 'Gross margin (on the selling price)'. Selling price = £60.00 × 100 ÷ (100 − 25) = £80.00, so the profit is £20.00 and the markup 33.33%. With VAT at 20%, your customer pays £96.00. Adding 25% to the cost instead, a 25% markup, would give £75.00 and a margin of only 20%.

Frequently asked questions

What is the difference between margin and markup?

Margin is profit as a share of the selling price; markup is profit as a share of the cost. A 50% markup is a 33.33% margin, and a 50% margin is a 100% markup. HMRC calls the first the gross profit rate and the second the rate of mark-up.

How do I convert a markup into a margin?

Margin = markup ÷ (markup + 100) × 100. A 25% markup gives 25 ÷ 125 × 100 = 20%. The other way round, markup = margin ÷ (100 − margin) × 100, so a 20% margin is a 25% markup.

How do I price for a target margin?

Divide the cost by 1 minus the margin. For a £30 cost and a 40% margin: £30 ÷ 0.6 = £50. Multiplying the cost by 1.4 gives £42 instead, which is a 40% markup but only a 28.57% margin.

Should I include VAT in my margin?

No, if you are VAT-registered: compare prices and costs excluding VAT, because the VAT you charge goes to HMRC and you can reclaim the VAT you pay. If you are not registered, you charge no VAT and cannot reclaim the VAT you pay, so that VAT is part of your cost: enter the cost including it and choose 'No VAT'.

What if my margin is negative?

Then the selling price is below the cost and you are selling at a loss. The calculator flags it so that you can check your figures.

Sources

  1. HMRC Enquiry Manual EM3503: business models, formulae and terms (12 January 2016)
  2. HMRC Enquiry Manual EM3504: gross profit rate and rate of mark-up (12 January 2016)
  3. HMRC Enquiry Manual EM3082: gross profit rate (10 September 2025)
  4. HMRC: VAT guide (VAT Notice 700), paragraph 4.1 (how VAT works) (25 June 2026)
  5. GOV.UK: Charge, reclaim and record VAT, reclaiming VAT on business expenses (VAT-registered businesses) (30 October 2024)
  6. GOV.UK: VAT rates (12 December 2014)

This calculator gives general information, not legal, tax or accounting advice. It works out a gross margin: overheads, discounts and other costs are not included.

Last reviewed: