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GovMath.

Business & Self-Employment · Pricing tool

Retail Markup Calculator

Set the selling price from cost + target margin OR cost + target markup. Toggle between the two — they are NOT the same.

£
%

Required selling price

£50.00

Profit per unit: £25.00

Tip: a 50% margin requires a 100% markup — and a 50% markup is only a 33% margin. Always specify which.

How we calculated your result

For target margin m: price = cost ÷ (1 − m). For target markup k: price = cost × (1 + k). A 50% margin needs a 100% markup; the formulas diverge fast as percentages rise.

Official UK rules in simple English

  • Margins above 100% are impossible (price would be infinite).
  • Markup can be any positive value.
  • Both should be calculated ex-VAT.

Common pitfalls to watch out for

  • ⚠ Markup math is easier; margin math drives profit

    Retailers often think in markup (it’s a simple multiplier). Finance teams think in margin (P&L line).

  • ⚠ Multiple stages compound

    Manufacturer 30% margin → distributor 25% markup → retailer 50% margin. End consumer pays a lot more than cost.

  • ⚠ Don’t forget VAT at point of sale

    Add 20% VAT to your ex-VAT price for consumer-facing display. Margin should never include VAT.

Frequently asked questions

Why are these different?
Margin uses price as the denominator; markup uses cost. Same profit, different base.
Convert markup to margin?
Margin = markup ÷ (1 + markup). So 50% markup = 33% margin. 100% markup = 50% margin.

Pricing utility. Market positioning, competitor analysis and price elasticity are equally important.

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