Apex Suite

Profit Margin & Markup Calculator

Free

Margin is profit as a share of the selling price; markup is profit as a share of cost. Mixing them up is one of the most common ways businesses under-price. Enter costs and prices before tax (GST, VAT or sales tax).

Sets the currency, how tax is described and the rate for prices including tax. It starts on the country your tools are set up for.
Everything it costs you to supply the item or do the job, such as materials, parts and labour. Leave out GST.

What the item or job costs you, before GST.

Margin is profit as a share of the selling price. Markup is profit as a share of your cost. A 50% markup is only a 33% margin. Choose “my selling price” to check a price you already charge.
How much of each sale you want to keep as profit. A 40% margin means 40 of every 100 you sell for is profit.
How much you add on top of your cost. A 50% markup on a cost of 60 gives a price of 90.
The price you charge now, before GST. The tool shows the margin and markup it gives you.

Profit margin vs markup

Margin and markup both measure profit, but from different starting points. Margin is profit as a share of the selling price. Markup is profit as a share of your cost. Mixing them up is one of the most common ways small businesses under-price.

Margin
Margin % = (selling price − cost) ÷ selling price × 100
Markup
Markup % = (selling price − cost) ÷ cost × 100
Price for a target margin
Selling price = cost ÷ (1 − margin %)
Price for a target markup
Selling price = cost × (1 + markup %)

Example: An item that costs you $60 and sells for $100 makes $40 profit. That’s a 40% margin but a 66.7% markup.

Common questions

What’s the difference between margin and markup?

Margin compares profit to the selling price; markup compares profit to your cost. The same $40 profit on a $60 cost is a 40% margin and a 66.7% markup, so a 40% markup gives a much lower profit than a 40% margin.

What markup gives me a 30% margin?

About 42.9%. Divide your cost by 0.7 to get the selling price: a $70 cost sells for $100.

Should I include GST when working out margin?

No. Use prices and costs excluding GST. The GST you collect is passed on to the ATO, so it isn’t part of your profit. The same goes for VAT or sales tax in other countries.

Does it work outside Australia?

Yes. Choose your country and the calculator uses its currency and tax wording, such as pounds and VAT for the United Kingdom. The prices including tax use the country’s standard rate. The margin and markup maths is the same everywhere.

What is a good profit margin for a small business?

It varies a lot by industry. Your gross margin needs to cover your overheads, such as rent, insurance, vehicles and your own wage, and still leave a profit. The Break-even Calculator shows how many sales that takes.

General information only, not tax or financial advice. Check with your accountant, tax agent or BAS agent for your situation.