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.
Figures verified against HMRC Corporation Tax rates on .
Written by James HartleyCIMA
Calculator
The amount you pay to produce or buy the item.
Profit as a % of cost. A 100% markup doubles the cost price.
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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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Official Rates Used
This calculator uses official HMRC rates for 2026/27. View the current rates at GOV.UK:
Rates last verified:
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.