Margin and markup calculator
The price that gives the margin you want, the margin a markup really gives, and the price with GST.
Free, with no sign-up Worked out in your browser The working shown, line by line
The answer
| The price | |
| Cost a unit | 100.00 |
| What was given | Margin of 30% on price |
| Selling price | 142.86 |
| Profit a unit | 42.86 |
| The two measures | |
| Margin, on the price 42.86 ÷ 142.86 | 30% |
| Markup, on the cost 42.86 ÷ 100.00 | 42.86% |
- Margin is on the price and markup is on the cost. They are equal only at nil: a 50% markup is a margin of a third.
- GST is not part of either. It is collected for the government and never reaches the margin.
Not statutory. The arithmetic every quotation rests on.
How it is worked out
Margin is profit as a share of the selling price; markup is profit as a share of the cost. The same profit is always a smaller margin than markup.
To price for a margin, divide the cost by one less the margin: a cost of ₹100 at a 30% margin is ₹100 ÷ 0.70, or ₹142.86. Adding 30% to the cost gives ₹130, which is only a 23% margin.
To convert between them: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin).
Worked example: A cost of ₹100 and a 30% margin wanted
The price is ₹142.86, a markup of 42.86% on the cost, and ₹168.57 with 18% GST.
Questions
What is the difference between margin and markup?
Margin divides the profit by the selling price; markup divides it by the cost. A product costing ₹100 sold for ₹150 has a 50% markup but a 33.33% margin.
How do I price a product for a target margin?
Selling price = cost ÷ (1 − margin). For a 25% margin on a ₹300 cost, the price is ₹300 ÷ 0.75 = ₹400.
Should GST be included in the margin?
No. GST is collected on behalf of the government and paid over, so margin and markup are worked on the price before tax.
The same answer, on every client, with the working paper written for you
KiyoTool’s costing calculators and cost sheet tool work the margin for every product at once, and the unusual sales and purchase finders show which months and which customers moved the margin. It runs on Windows, offline, and your clients' books never leave the machine.