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Markup & margin calculator

Turn a cost into a quote price, or work out what margin a price really leaves you. Markup and margin are two different percentages off the same two numbers — this tool shows both so you can tell which one a supplier or a client means.

Price a job

What do you want to work out?
Materials, labour and anything else that only applies when you do the job.
Adds labour to the cost above before the markup is applied.

Markup and margin are not the same number

This is the single most common pricing mistake in small business, usually because a supplier says "our trade price plus 30%" and a client says "I need my supplier to run at 30% margin" — and those are different prices.

Markup on costGross margin Cost $100 sells forTo make $100 cost return this margin

A 30% markup on a $100 cost is a $130 price with a 23.1% margin. A 30% margin needs a $142.86 price — which is a 42.9% markup. Same words, eleven dollars apart.

Where GST belongs in this

GST is not income. If you are registered for GST, the 10% you add to an invoice is collected on behalf of the ATO and does not increase your margin. Do all your pricing on the GST-exclusive figure:

If you quote a client "$550 including GST" and forget to strip it back, it is easy to think your margin is 45% and be wrong by five points — which on a year of turnover is the difference between a profitable business and a busy one. The GST calculator strips it out, and the invoice generator does it per line.

Break-even

Margin tells you what a job earns. Break-even tells you how many of them you need. If your overheads are $3,000 a week and each job contributes $200 of gross profit, you need 15 jobs a week before you have made a cent for yourself.

Two things to watch:

This is arithmetic, not advice. A margin that sustains one trade may be far too thin in another, and pricing also has to carry tax, bad debts, unpaid invoices, downtime and your own wages. This tool does not know any of those. It will tell you what a price implies; whether that is enough to run on is a question for your accountant and your own numbers.

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Common questions

What is the difference between markup and margin?
Markup is the profit as a percentage of your cost. Margin (gross margin) is the profit as a percentage of the selling price. Buy at $100 and sell at $150: the markup is 50% but the margin is only 33.3%. They are never the same number unless the profit is zero.
How do I work out a price from a markup?
Multiply the cost by 1 plus the markup as a decimal. A 40% markup on a $250 cost is $250 × 1.4 = $350. The profit is $100, which is 40% of the cost and 28.6% of the price.
How do I work out a price to hit a target margin?
Divide the cost by one minus the margin. To make a 40% margin on a $300 cost, the price is $300 ÷ 0.6 = $500. Note how different that is from adding 40% to the cost, which would give you $420 and a margin of only 28.6%.
Why can't I have a 100% margin?
Because margin is profit divided by price, and the price can only be all profit if the cost is zero. As the margin approaches 100%, the required price heads to infinity. Markup has no such ceiling — you can mark up by any percentage you like.
Should markup be calculated on the GST-inclusive or GST-exclusive price?
On the GST-exclusive figure. GST is collected on behalf of the ATO, not earned by you, so a 10% GST adds nothing to your margin. If you are registered for GST and quote $550 including GST on a $300 cost, your GST-exclusive price is $500 and your margin is 40% — the same as quoting $500 plus GST.
What margin should a small business aim for?
It depends entirely on your industry, and any single number quoted as a rule is a guess. Trades and retail commonly run 30–50% gross margins, professional services often higher, and high-volume resale lower. What matters more than the target is knowing your actual number and your break-even — a business with a 20% margin needs five times the sales of one with an 80% margin to cover the same overheads.