Margin and markup calculator
Enter what an item costs you and the margin you want, and get the selling price. Or enter the selling price and see the margin and markup you are really making.
Margin and markup are not the same
Many pricing mistakes come from mixing the two. A trader who wants to keep 20% of every sale and adds 20% to the cost keeps only 16.67%. Over a year of sales, that gap is a large part of the profit.
| To get | Formula | Cost ₹80, price ₹100 |
|---|---|---|
| Margin | (price − cost) ÷ price × 100 | 20% |
| Markup | (price − cost) ÷ cost × 100 | 25% |
| Price for a margin | cost ÷ (1 − margin ÷ 100) | ₹80 ÷ 0.80 = ₹100 |
| Price for a markup | cost × (1 + markup ÷ 100) | ₹80 × 1.25 = ₹100 |
Getting the cost right
The margin is only as true as the cost you start from. Use the landed cost: the purchase price plus freight and other charges to bring the goods in. Leave GST out on both sides if you are registered. And remember that this is the gross margin on one item; rent, salaries and interest still have to be paid from it.
Questions people ask
What is the difference between margin and markup?
Both describe the same profit, measured against different amounts. Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. An item bought at ₹80 and sold at ₹100 has a margin of 20% and a markup of 25%.
How do I find the selling price for a margin I want?
Divide the cost by 1 minus the margin. For a cost of ₹80 and a margin of 20%, ₹80 ÷ 0.80 gives a selling price of ₹100. Adding 20% to the cost gives only ₹96, which is a margin of 16.67%.
Should the prices include GST?
No. Use the cost and the selling price before GST. If you are registered, the GST you charge is not your income and the GST you pay on purchases comes back as input tax credit, so neither is part of your margin.
What should I count as cost?
The purchase price plus what it took to bring the goods to your shelf: freight, loading, insurance and any duty you cannot claim back. Leaving these out makes the margin look better than it is.
How does a discount change my margin?
More than it seems. On a margin of 20%, a discount of 5% on the selling price takes away a quarter of your profit. Enter the discounted price as the selling price to see the margin that is left.
Read next
- How to know your real profit every month
- Profit and loss, explained
- Stock valuation and landed cost in EaseDesk
- Accounting and finance in EaseDesk
- EaseDesk for wholesalers
- EaseDesk for retail shops
More free tools
- Invoice maker Fill in a tax invoice with the right GST and print it or save it as a PDF.
- Reorder level calculator Work out the stock level at which to reorder an item, from sales and delivery time.
- GST calculator Add GST to a price, or take it out of a price that includes it, with CGST, SGST or IGST.
- GSTIN checker Check that a GSTIN is correctly formed, and read its state and PAN.
- HSN and SAC code finder Find the HSN code for goods or the SAC code for a service, by name or by number.
- GST due dates The due date of every GST return for each month of this financial year.
See the margin on every item you sell.
EaseDesk values your stock at what it really cost, freight included, and shows sales and profit by item and customer. Try it free for 14 days with up to 5 users.
- ₹0 to start: 14-day free trial
- ₹490 a month for the first user, billed yearly
- ₹290 a month for each additional user
- ₹0 for your CA’s login
Prices before GST. Nothing is charged unless you choose to subscribe.