Pricing and Margin Calculator

Check whether your pricing leaves enough margin after direct costs, labour, overheads, GST and profit expectations.

Do Not Confuse Markup With Margin

Many business owners increase their costs by a markup percentage and assume they are making the same margin. They are not the same thing. This calculator helps you work backwards from your target gross margin to find the selling price required to protect profitability.

Enter Your Pricing Numbers

Use figures for one product, one job, one service package or one average sale. The calculator estimates the selling price needed to achieve your target margin.

Direct product or material cost

Stock, materials, subcontractors or direct delivery costs.

Labour hours required

Estimated labour time needed to deliver this sale.

Hourly labour cost

Use loaded labour cost where possible, not just base wage.

Overhead allowance

Allocated admin, rent, software, freight, packaging or operating costs.

Target gross margin percentage

If you want to keep $45 from every $100 of sales, enter 45.

GST percentage

Use 10 for standard Australian GST, or 0 if GST does not apply.

Current sell price excluding GST

Optional. Enter your current price to compare against the recommended price.

Expected sales volume

Estimated number of sales per month for this product or service.

Your Result

This is the estimated selling price required to achieve your target gross margin.

Recommended price excluding GST $445

Recommended price including GST $490

Total cost per sale $245

Gross profit per sale $200

Required markup on cost 82%

Current margin at your price 39%

Monthly gross profit at volume $4,000

A 45% margin requires a much higher markup than 45%. This is why margin and markup should not be treated as the same thing.

How This Calculator Works

The calculator adds your direct costs, labour costs and overhead allowance to estimate the true cost of one sale. It then calculates the selling price required to achieve your chosen gross margin.

Total cost includes direct costs, labour and overhead allowance.
Recommended price is calculated from the target margin.
GST is added after the excluding GST price is calculated.
The current price field helps compare your existing pricing against the recommended price.

Markup and Margin Are Different

A 50% markup does not produce a 50% margin. If an item costs $100 and you mark it up by 50%, the selling price is $150 and the profit is $50. That profit is only 33.3% of the selling price.

Markup is profit compared to cost.
Margin is profit compared to selling price.
Pricing decisions should usually be based on margin, not just markup.

Want to Go Deeper?

Embark members will get access to advanced pricing tools, including downloadable margin worksheets, product pricing models, service pricing templates and scenario comparisons.

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