Margin and VAT Calculator

Created by Mateusz Mucha and Tibor Pál, PhD candidate
Reviewed by Jack Bowater
Based on research by
Schenk, A.; Oldman, O. Value Added Tax: A Comparative Approach (2007)
Last updated: Jan 17, 2023

It's quite common for anyone who is selling anything, whether it be in retail or at home, to have to calculate a profit margin and the amount of VAT at the same time. As with most calculators here at Omni, you are free to input any value you would like to be calculated. The order of fields is based on the most common scenario, but we can easily imagine a situation where you'd like to come up with a max price you're willing to pay (I need to sell it for $140 and maintain my usual 40% margin). Our calculator will do this too. We also have a margin and sales tax calculator for those of you operating in countries when sales tax is used instead of VAT.

How do I calculate gross cost?

To determine the gross cost, you need to:

  1. Multiply the net cost by the VAT rate.
  2. Add the net cost to the value from Step 1.
  3. The result is the gross cost! Don't hesitate to use an online margin calculator to verify the result.

How do I calculate markup given margin?

To determine markup, follow these steps:

  1. Write down the margin (as a decimal, not a percentage).
  2. Calculate 1 - margin.
  3. Divide the margin by the number from Step 2.
  4. The number you've obtained is the markup. Convert it to percentage.

FAQ

What is the markup if the margin is 10%?

The markup is 11%. We've applied the formula markup = margin / (1 - margin) to get this result. Plugging in the numbers, we have 0.1 / (1 - 0.1) = 1 / 9 = 0.111... = 11%, as claimed.

What is the gross cost if the net cost is $100 and VAT is 20%?

The gross cost is $120. This is because 20% of $100 is $20, which is the VAT amount you need to add to the net cost to get the gross cost: $100 + $20 = $120.

Mateusz Mucha and Tibor Pál, PhD candidate
VAT
%
Net cost
$
Gross cost
$
Margin
%
Markup
%
My net price
$
My gross price
$
Profit
$
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