Enter what one unit costs you, your fixed costs and how many units you expect to sell, then your target margin or markup. You get the selling price excluding and including VAT, the margin you actually earn and your break-even point, with every step shown. It works for a product or for a service sold by the unit.
Start from your full cost
The variable cost is what each unit sold costs you: the purchase price or materials, packaging, delivery and any sales fees. Add your fixed costs, such as rent, insurance, software and your own pay, and the number of units you expect to sell over the same period: the calculator spreads the fixed costs across them.
Choose margin or markup
Margin is profit as a share of the selling price; markup is profit as a share of cost. HMRC's manuals draw the same line between the 'gross profit rate' and the 'rate of mark-up'. An item that costs £60 and sells for £100 excluding VAT makes £40: a 40% margin and a 66.67% markup.
Add VAT and choose a price ending
VAT is added at the rate you choose: 20% standard, 5% reduced or 0% zero rate. If your business is not VAT-registered, choose 'No VAT': you cannot charge VAT, and you generally cannot reclaim the VAT on your costs, so enter them including it. A price ending such as .99 always rounds up: the price including VAT if you sell to consumers, the price excluding VAT if you sell to businesses.
Read the result
You see the margin and markup you actually earn after rounding, the multiplier (price ÷ cost) and, if you give a quantity, revenue and profit for the period. Break-even is the number of units you need to sell at this price to cover your fixed costs. Copy the workings, export them as a CSV file or save them to Priostack.
Full cost = variable cost + fixed costs ÷ units.
With a margin m: price excl. VAT = cost ÷ (1 − m).
With a markup k: price excl. VAT = cost × (1 + k).
VAT = price × rate; price incl. VAT = price + VAT.
If the price incl. VAT is rounded, VAT is taken back out with HMRC's VAT fraction: VAT = gross × rate ÷ (100 + rate).
Profit = price excl. VAT − cost; margin = profit ÷ price; markup = profit ÷ cost.
Every amount is rounded to the nearest penny, halves rounded up: the full cost first, then the price, then the VAT.
Example: a product costing £12 with £2,000 of fixed costs
A product costs £12.00 to make, and fixed costs for the quarter are £2,000 over 500 expected sales, or £4.00 a unit, so the full cost is £16.00. At a 40% margin the price is £16.00 ÷ 0.60 = £26.67 excluding VAT, or £32.00 including 20% VAT. Rounded up to £32.99, it contains £32.99 × 1/6 = £5.50 of VAT, leaving £27.49: a profit of £11.49 a unit, or a 41.80% margin. Over 500 units, revenue is £13,745 and profit £5,745; at this price, 130 units cover the fixed costs.
