Free Invoice MakerThe formulas
Margin
profit ÷ price × 100
Markup
profit ÷ cost × 100
Price for a margin
cost ÷ (1 − margin ÷ 100)
Margin to markup table
| Margin | Same as markup of |
|---|---|
| 10% | 11.11% |
| 20% | 25% |
| 25% | 33.33% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100% |
Once you have a price, send it as a quote or invoice, and add tax with the VAT calculator.
Frequently asked questions
What is the difference between margin and markup?
Both use the same profit, but divide it by different numbers. Margin is profit ÷ selling price. Markup is profit ÷ cost. Buying at 80 and selling at 100 is a 20% margin and a 25% markup.
How do I price for a 30% margin?
Divide the cost by (1 − 0.30). A cost of 10.00 needs a price of 10.00 ÷ 0.70 = 14.29. Adding 30% to the cost (13.00) would only give a 23% margin.
Can a margin be 100% or more?
No. Margin is a share of the price, so it is always below 100% (100% would mean the cost was zero). Markup has no upper limit: a 200% markup triples the cost.
Should VAT be included?
Usually not. Work out margin and markup on prices without VAT, because the tax is passed on to the tax authority. Use the VAT calculator to add tax afterwards.