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Markup and margin calculator

Put in what it costs you and either add a markup or keep a margin. See the price to quote, the profit, and both percentages side by side, with GST added only if you charge it.

$

How do you want to price it?

%

GST

The answer

Price to quote, excluding GST $1,250.00
Price including GST $1,375.00
GST $125.00
Profit $250.00
Markup 25.0 %
Margin 20.0 %
Turn this into a quote

Opens the free quote generator with these as lines. You add your prices.

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It only fills in the measurements. The working out is the calculator's, and prices are always yours.

The same cost, priced three ways

Markup: price = cost x (1 + markup). Margin: price = cost / (1 - margin). Profit is price minus cost; GST, when you charge it, is 10% of the price on top.

A 20% markup

Hardwood decking, $1,200 cost, 20% markup
Your cost, excluding GST $1,200.00
How do you want to price it? Add a markup
Percentage 20 %
GST I charge GST
Price including GST $1,584.00
GST $144.00
Profit $240.00
Markup 20.0 %
Margin 16.7 %
Price to quote, excluding GST $1,440.00

A 20% markup only keeps 16.7 cents of each dollar the customer pays.

A 20% margin

The same $1,200, priced to keep a 20% margin
Your cost, excluding GST $1,200.00
How do you want to price it? Keep a margin
Percentage 20 %
GST I charge GST
Price including GST $1,650.00
GST $150.00
Profit $300.00
Markup 25.0 %
Margin 20.0 %
Price to quote, excluding GST $1,500.00

To keep 20% of the price you add 25% to the cost: $60 more profit than the markup above, from the same 20 typed in.

Not registered for GST

Fixings, $640 cost, 30% markup, no GST
Your cost, excluding GST $640.00
How do you want to price it? Add a markup
Percentage 30 %
GST Not registered
Price including GST $832.00
GST $0.00
Profit $192.00
Markup 30.0 %
Margin 23.1 %
Price to quote, excluding GST $832.00

Not registered, so no GST line: the price to quote is the price they pay.

Markup and margin questions#

What is the difference between markup and margin?
Markup is your profit as a share of what the job cost you. Margin is the same profit as a share of the price the customer pays. Buy for $1,000 and sell for $1,250: the profit is $250, which is a 25% markup but a 20% margin. Same dollars, two percentages.
Why does a 20% margin need more than a 20% markup?
Because margin is measured against the bigger number, the price. To keep 20 cents of every dollar the customer pays, you have to add 25% to your cost. Mix the two up and every job comes in under what you meant to make.
How do I add a markup?
Multiply your cost by 1 plus the markup. A 30% markup on $640 of fixings is 640 x 1.3 = $832.
How do I price for a margin?
Divide your cost by 1 minus the margin. A 20% margin on $1,200 of decking is 1,200 / 0.8 = $1,500. A margin can never reach 100%, because that would mean the job cost you nothing.
Do I mark up before or after GST?
Before. Work in GST-exclusive figures, add your markup, then GST goes on top if you are registered. The GST you collect is the ATO's, so marking it up overcharges the customer and earns you nothing.
What markup should I use?
That is your call, and it depends on your overheads, the risk in the job and what the work is worth where you are. This calculator shows the price that follows from the percentage you choose; it does not choose one for you.