METHOD & GUIDANCE
How this calculation works
Keep every input on the same time basis—for example, one month or one financial year—and do not mix cash figures with accrual figures. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Use the recommended price as a floor under the stated assumptions, then test fees, overhead and rounding before publishing a customer price.
Worked example
The opening inputs combine 65 of unit cost with 3% fees and a 35% target margin to calculate the price needed to preserve both.
Common mistakes
- Setting target margin plus percentage fees at 100% or more.
- Leaving per-sale overhead out.
- Rounding down and silently missing the target.
Frequently asked questions
Is the target pricing calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Should I include VAT in revenue and cost figures?
Use a consistent basis throughout. Businesses that recover input tax commonly model net figures; customer-facing prices may need to be considered VAT-inclusive.
Why can’t I simply add my target margin to cost?
Margin is measured as a share of selling price, not cost. The price must also leave room for percentage fees before the target share remains as profit.
Should I round the calculated price?
You can test a commercially sensible rounded price, but recalculate the resulting margin after rounding. Rounding down can quietly miss the target.
Continue the decision
- Profit Margin Calculator — See profit, margin and markup from one sale.
- Markup Calculator — Convert cost and markup into a selling price and margin.
Popular small-business decision paths
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Method reviewed 5 August 2026. Figures are illustrative and calculated locally in your browser. Official sources are linked where a rule or obligation affects how the result should be used. Read the Tool IQ calculation standard for our checking process, limitations and corrections policy.