METHOD & GUIDANCE
How this calculation works
Enter figures from the same period and on a consistent sales tax-inclusive or sales tax-exclusive basis. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Check the equivalent margin before accepting a markup-based price, then test whether expected volume covers fixed costs.
Worked example
A 60 cost with 50% markup produces a 90 price, 30 profit and a 33.3% gross margin.
Common mistakes
- Expecting 50% markup to equal 50% margin.
- Applying markup to an incomplete cost base.
- Ignoring discounts that reduce the realised price.
Frequently asked questions
Is this 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 sales tax?
Use a consistent basis throughout. Businesses that recover input tax commonly model net figures; consumer-facing prices are often considered gross.
Continue the decision
- Profit Margin Calculator — See profit, margin and markup from one sale.
- Break-even Calculator — Find the sales volume needed to cover every cost.
Method reviewed 26 July 2026. Figures are illustrative and calculated locally in your browser.