Margin & VAT Calculator

Calculate selling price, VAT, margin, markup and profit from cost.

Enter VAT, choose whether your cost is net or gross, then solve by margin, markup, price or profit.
%
Leave blank for 0% VAT.
USD
USD %

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.

Sources

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