Markup Calculator
Markup is profit as a percentage of cost; margin is profit as a percentage of selling price. A £50 product sold at £75 has a 50% markup but only a 33.3% margin, very different numbers that cause pricing confusion. Enter your cost and target markup or selling price below to see both metrics instantly.
Calculation method: Net position arithmetic. This tool runs a model on the figures you enter, so there is no official rate table behind the result.
Calculator
The amount you pay to produce or buy the item.
Profit as a % of cost. A 100% markup doubles the cost price.
What this calculation assumes
The result adds the amounts you enter and subtracts the ones you enter as outgoings. There is no external data set behind it: the output is only as good as your inputs.
- Every figure comes from you; nothing is estimated from national averages
- Values are point-in-time and are not tracked or stored
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How Markup Calculator Works
Cost to price: Selling Price = Cost × (1 + Markup%). Price to markup: Markup% = (Selling Price − Cost) / Cost × 100. Gross margin is then: (Selling Price − Cost) / Selling Price × 100.
VAT handling
Toggle VAT to see the price including 20% standard rate VAT. Your margin calculation is always on the ex-VAT price - VAT flows through to HMRC and should not be counted as revenue.
Frequently Asked Questions
Markup is the profit expressed as a percentage of the cost price. Margin is profit as a percentage of the selling price. A product costing £50 and sold for £75 has a £25 profit, which is a 50% markup (25/50) but only a 33.3% margin (25/75). Always clarify which you're using when discussing pricing.
Markup varies enormously by industry. Typical ranges: retail clothing 100-200%, food retail 30-60%, professional services 100-300%, software 200-500%, manufacturing 20-50%. The right markup depends on your costs, competition, and what customers will pay. Focus on getting to your desired net margin after all overheads.
If you're VAT-registered, you charge VAT on top of your selling price and pay it to HMRC. Your profit margin should be calculated on the ex-VAT price. VAT is collected on behalf of HMRC, not revenue. If you're not VAT registered (under the £90,000 threshold), you don't charge VAT and can potentially undercut competitors who must add 20% VAT.
Markup = Margin / (1 minus Margin). To achieve a 40% gross margin: Markup = 0.40 / (1 minus 0.40) = 0.40 / 0.60 = 66.7%. So you need to mark up your cost price by 66.7% to achieve a 40% margin. Our calculator shows both figures side-by-side.
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Sources and method
This calculator has no external rate table behind it. The result comes from the figures you enter and the model described in our methodology.
Method: Net position arithmetic.
Spotted a figure that looks wrong? Report a correction and we will check it against the source above.
Further reading
Background references used while writing this page. The sources behind the calculated figures are listed above.
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.