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Business & VAT

Profit Margin and Markup Calculator

Calculate margin and markup from cost and selling price, or find the price required for a target margin.

Price and margin

Use amounts excluding VAT and choose whether you know the selling price or target margin.

Switch between analysing a price and pricing from a margin target.

Direct cost per item or job, excluding VAT.

Customer price excluding VAT.

Result

Gross profit, price, margin, and markup before VAT and overhead.

Gross profit
SEK 400

Selling price minus entered cost.

Details

Selling price excluding VAT
SEK 1,000

Price used or required for the target margin.

Profit margin
40.00%

Gross profit as a share of selling price.

Markup
66.67%

Gross profit as a share of cost.

Analysis & guidance

  • Work before VAT

    Use the VAT calculator first if you need to separate VAT from revenue.

  • Use the real cost

    Include shipping, packaging, commission, and direct labour where relevant.

  • Test several prices

    Compare a cautious price, your target, and the market price before deciding.

Common questions

What is the difference between margin and markup?

Margin is profit divided by selling price. Markup is profit divided by cost.

Should prices include VAT?

Businesses normally compare revenue and cost excluding VAT, because collected VAT is not revenue.

Can margin be negative?

Yes. A selling price below cost produces negative gross profit, margin, and markup.

Is gross profit the same as net profit?

No. This calculation does not deduct overhead, tax, or other business costs.

Margin and markup differ

Margin divides profit by selling price; markup divides it by cost. A cost of 600 and price of 1,000 means 40% margin but 66.7% markup.

Work backwards from a target

For a 40% margin on a cost of 600, divide 600 by 1 − 0.40. The required selling price is 1,000 before VAT.

This is gross profit

The result only deducts the entered cost. Wages, shipping, returns, premises, payment fees, and other overhead still have to be covered.

Profit margin and markup without the percentage trap

Start with prices excluding VAT

For a business, collected VAT is normally neither revenue nor profit. Compare cost and selling price before VAT. If you only know the customer price including VAT, remove the tax first with the VAT calculator.

Margin and markup use different bases

Gross profit is selling price minus cost. Margin divides gross profit by selling price; markup divides it by cost. A product costing 600 and selling for 1,000 therefore produces 400 gross profit, a 40% margin, and a 66.7% markup.

Price from a target margin

Use price = cost / (1 − margin). A 40% target on a cost of 600 requires a selling price of 1,000 before VAT. Simply adding 40% to cost would only create a 28.6% margin.

Gross profit is not net profit

Shipping, packaging, commission, waste, returns, card fees, premises, administration, and labour may still consume the result. Include direct costs in the cost price, then check whether the remaining gross profit can cover overhead. Test a minimum sustainable price, your target, and the market price instead of trusting one percentage.

How to read this calculator

These results are meant as guidance. They are based on rules, assumptions, and simplified models that can differ from your exact real-world situation.

Estimate, not a legal decision

Use the result as decision support and planning help. For high-stakes choices, confirm the details with the relevant authority, lender, employer, or adviser.

Methodology

Each calculator uses defined inputs, assumptions, and logic. We explain the broader approach on the methodology page.

Read methodology

Sources and updates

Important calculators should be traceable back to official rules, public guidance, or other clearly stated references.

Read about sources

Common questions

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