Margin & VAT Calculator
Calculate selling price, VAT, margin, markup and profit from cost.
Use this Margin & VAT Calculator to calculate selling price, profit, margin, markup, and VAT from a product or service cost. You can enter either a VAT-exclusive net cost or VAT-inclusive gross cost and solve from the pricing value you already know.
Important: This calculator performs general margin, markup, profit, and net/gross VAT calculations. It is not a specialist VAT Margin Scheme calculator. VAT treatment and rates depend on the country, transaction, product or service, and your tax status.
Margin, Markup and Profit Formulas
Profit = net selling price − net cost
Margin % = profit ÷ net selling price × 100
Markup % = profit ÷ net cost × 100
Margin and markup are different because they use different bases. Margin measures profit against the selling price, while markup measures profit against cost.
To calculate selling price from markup:
Net selling price = net cost × (1 + markup % ÷ 100)
To calculate selling price from a target margin:
Net selling price = net cost ÷ (1 − margin % ÷ 100)
VAT Calculation
When starting with a VAT-exclusive price:
VAT amount = net price × VAT rate ÷ 100
Gross price = net price × (1 + VAT rate ÷ 100)
When starting with a VAT-inclusive gross price:
Net price = gross price ÷ (1 + VAT rate ÷ 100)
VAT amount = gross price − net price
The calculator applies the same approach when converting between net and gross cost.
Worked Example
Suppose a product has a $100 net cost, you want a 25% markup, and the applicable VAT rate is 20%.
First calculate the net selling price:
$100 × 1.25 = $125
Profit:
$125 − $100 = $25
Margin:
$25 ÷ $125 × 100 = 20%
VAT:
$125 × 20% = $25
Gross selling price:
$125 + $25 = $150
So a 25% markup produces a 20% margin, with a net selling price of $125 and a VAT-inclusive price of $150 in this example.
Important Notes
- Margin and markup are not interchangeable. A 25% markup does not mean a 25% margin.
- Profit in this calculator is a simple pricing profit based on the entered cost. It does not automatically deduct wages, rent, payment-processing fees, shipping, advertising, income tax, or other overheads.
- Use a consistent net basis when comparing cost, selling price, profit, margin, and markup where VAT can be reclaimed.
- If input VAT cannot be recovered, the gross cost may better represent the actual cost to the business.
- The calculator accepts a custom VAT percentage and does not determine which tax rate legally applies to a transaction.
- Zero-rated, exempt, reduced-rate, international, reverse-charge, and other special VAT transactions may require different tax treatment.
- This is not a VAT Margin Scheme calculator for eligible second-hand goods, works of art, antiques, collectors’ items, vehicles, or similar special-scheme transactions.