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
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 the markup 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 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 sales tax-inclusive.
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.
Popular small-business decision paths
- Set a price from cost and target margin
- Check profit and margin per sale
- Find the sales volume needed to break even
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.