# Margin and VAT Calculator

*“Value Added Tax: A Comparative Approach“*(2007)

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 where sales tax is used instead of VAT.

## How do I calculate gross cost?

To determine the gross cost, you need to:

- Multiply the
**net cost**by the**VAT rate**. **Add**the net cost to the value from Step 1.- 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:

- Write down the
**margin**(as a decimal, not a percentage). - Calculate
`1 - margin`

. **Divide**the margin by the number from Step 2.- The number you've obtained is the markup. Convert it to a 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`

.