Margin & VAT Calculator
Calculate selling price, VAT, margin, markup and profit from cost.
Important Note : This is a general price, margin, markup, and VAT calculator. It is not a specialist VAT Margin Scheme calculator for second-hand goods.
Use this Margin & VAT Calculator to work out selling price, VAT, profit, margin, and markup from cost. It is useful for retailers, freelancers, small businesses, and anyone who needs a quick way to move between cost, net price, gross price, and profit-based pricing.
Reviewed by: AjaxCalculators Editorial Team
Last updated: April 24, 2026
Method source: Standard pricing relationships between cost, selling price, profit, margin, markup, and VAT-inclusive or VAT-exclusive pricing
Editorial standards: AjaxCalculators Editorial Policy
What This Margin & VAT Calculator Calculates
This calculator lets you start with cost and a VAT rate, then solve by one of several target values.
It can calculate:
- Net cost
- Gross cost
- Margin
- Markup
- My net price
- My gross price
- Profit
The live tool also lets you choose whether your input cost is already net of VAT or gross of VAT.
How the Margin & VAT Calculator Works
1) Net and Gross Price with VAT
VAT is calculated from the tax value of the supply. HMRC explains that the VAT amount is the tax value multiplied by the VAT rate. If the VAT-exclusive price is known, then:
VAT amount = net price × VAT rate
Gross price = net price + VAT
If the gross price already includes VAT, HMRC explains that the VAT must be extracted using the VAT fraction:
VAT fraction = rate / (100 + rate)
For example, at 20% VAT, the VAT fraction is 20/120 = 1/6.
2) Profit
Profit is the difference between selling price and cost:
Profit = selling price − cost
3) Margin
Margin is profit as a percentage of selling price / revenue.
Margin % = profit ÷ selling price × 100
This is why margin tells you how much of the final sale price is retained as profit.
4) Markup
Markup is different. It is the difference between selling price and cost as a percentage of cost.
Markup % = (selling price − cost) ÷ cost × 100
Because markup uses cost as the base and margin uses selling price as the base, the two percentages are not the same.
Margin vs Markup: Why People Confuse Them
This is one of the most important ideas on the page.
Suppose an item costs $100 and sells for $125.
- Profit = $25
- Markup = 25 / 100 = 25%
- Margin = 25 / 125 = 20%
Same item, same profit, different percentages — because the denominator changes.
Assumptions and Important Notes
- This is a general pricing, margin, markup, and VAT calculator.
- It is not a specialist VAT Margin Scheme calculator for second-hand goods, works of art, antiques, or collectors’ items.
- Margin and markup are different measures and should not be used interchangeably.
- If your cost already includes VAT, the tool must remove the VAT element before comparing profit or margin on a net basis.
- VAT treatment can vary by jurisdiction, product category, registration status, and scheme, so always check the tax rules that apply to your business.
Worked Example
Suppose a business has:
- Net cost: $100
- Desired markup: 25%
- VAT rate: 20%
Step 1: Find the selling price before VAT
Markup = (selling price − cost) ÷ cost
Selling price = cost × (1 + markup)
Selling price = 100 × 1.25 = $125 net
Step 2: Find profit
Profit = 125 − 100 = $25
Step 3: Find margin
Margin = 25 ÷ 125 = 20%
Step 4: Add VAT
VAT = 125 × 20% = $25
Step 5: Find gross selling price
Gross price = 125 + 25 = $150
This example shows why one tool that handles cost, markup, margin, and VAT together can save time and reduce pricing mistakes.
How to Use This Margin & VAT Calculator
- Enter the VAT rate, or leave it blank for 0% VAT.
- Choose whether your input cost is net cost or gross cost.
- Enter the cost amount.
- Select what you want to solve by: margin, markup, net price, gross price, or profit.
- Enter the known target value.
- Click Calculate to see all related pricing outputs.
How to Interpret the Result
Net cost and gross cost tell you whether VAT is excluded or included in the cost figure.
My net price is your selling price before VAT.
My gross price is your customer-facing price after VAT has been added.
Profit is the currency amount left after subtracting cost from selling price.
Margin shows profit as a share of selling price, while markup shows profit as a share of cost.
Practical Uses of a Margin & VAT Calculator
- set selling prices from cost and target profit
- compare margin and markup correctly
- add VAT to a net price or extract VAT from a gross price
- build quick pricing quotes for products or services
- check whether current pricing still meets target profit goals
References
- HMRC VAT guide: VAT on tax value and VAT fractions for VAT-inclusive prices
- CFI: gross profit margin formula as profit divided by revenue
- CFI: markup formula and difference between markup and gross margin
- HMRC Margin Scheme: margin-scheme VAT is a different specialist method
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Disclaimer: This calculator is for educational and general business-pricing use. It does not replace professional accounting or tax advice, and it is not a substitute for jurisdiction-specific VAT rules or specialist VAT schemes.