Markup and margin calculator Margin or markup: find your price (with GST and QST)
In short
Markup is calculated on cost; margin is calculated on the selling price. The same profit gives two percentages: a 25% markup is a 20% margin.
To hit a target margin, divide the cost by (1 − margin): a $1,000.00 cost with a 30% margin gives $1,428.57, not $1,300.00. The calculator works all three ways, with or without GST and QST.
Markup and margin calculator
Materials, labour and other costs of the job.
The percentage added to the cost. Example: 25.
Result
- Selling price (before tax)
- $1,500.00
- Profit
- $300.00
- Margin on the selling price
- 20%
- Markup on cost
- 25%
With a 25% markup, a $1,200.00 cost gives a $1,500.00 price: a 20% margin.
The calculation
$1,200.00 × (1 + 25%) = $1,500.00
The calculation runs in your browser: what you enter is not sent anywhere.
Margin vs markup: the difference
Both measure the same profit, the selling price minus the cost. They compare it to a different amount.
Margin
Profit as a percentage of the selling price. It's the share of each dollar billed that you keep once the cost is paid.
Margin = (price − cost) ÷ price
Markup
Profit as a percentage of the cost. It's what you add to the cost to set the price.
Markup = (price − cost) ÷ cost
The trap: adding 30% to the cost does not give a 30% margin. On a $1,000.00 cost, the price becomes $1,300.00, and the margin is only 23.08%. For a true 30% margin, you need to charge $1,428.57, which is a 42.86% markup.
Margin and markup conversion table
Calculated by this page's calculator, for a $1,000.00 cost. Percentages are rounded to two decimals.
| Markup on cost | Margin on price | Price for a $1,000.00 cost | Profit |
|---|---|---|---|
| 10% | 9.09% | $1,100.00 | $100.00 |
| 15% | 13.04% | $1,150.00 | $150.00 |
| 20% | 16.67% | $1,200.00 | $200.00 |
| 25% | 20% | $1,250.00 | $250.00 |
| 30% | 23.08% | $1,300.00 | $300.00 |
| 40% | 28.57% | $1,400.00 | $400.00 |
| 50% | 33.33% | $1,500.00 | $500.00 |
| 60% | 37.5% | $1,600.00 | $600.00 |
| 75% | 42.86% | $1,750.00 | $750.00 |
| 100% | 50% | $2,000.00 | $1,000.00 |
| Target margin | Markup to apply | Price for a $1,000.00 cost | Profit |
|---|---|---|---|
| 10% | 11.11% | $1,111.11 | $111.11 |
| 15% | 17.65% | $1,176.47 | $176.47 |
| 20% | 25% | $1,250.00 | $250.00 |
| 25% | 33.33% | $1,333.33 | $333.33 |
| 30% | 42.86% | $1,428.57 | $428.57 |
| 35% | 53.85% | $1,538.46 | $538.46 |
| 40% | 66.67% | $1,666.67 | $666.67 |
| 50% | 100% | $2,000.00 | $1,000.00 |
These percentages are mathematical conversions, not recommended margins: your margin depends on your costs, your overhead and your market.
The formulas
The calculator's three directions, and the two conversions. Percentages are written as decimals in the formulas: 25% = 0.25.
- Price from a markup: price = cost × (1 + markup).
- Price from a target margin: price = cost ÷ (1 − margin).
- Margin from the price: margin = (price − cost) ÷ price.
- From markup to margin: margin = markup ÷ (1 + markup).
- From margin to markup: markup = margin ÷ (1 − margin).
The calculator works in whole cents and rounds the price to the cent. Converted percentages come from the formula, rounded to two decimals: a 25% markup gives exactly a 20% margin.
Example: replacing a water heater
Fictional example
Plomberie Exemple inc. replaces a water heater. The cost of the job is $1,200.00: $800.00 in materials and $400.00 in labour.
With a 25% markup, the price is $1,500.00 before tax. The profit is $300.00, a 20% margin. The client pays $1,724.63: $75.00 of GST and $149.63 of QST are added to the price.
If the business aims for a 25% margin instead, the price becomes $1,600.00, for a $400.00 profit: a 33.33% markup.
Margin is calculated before tax
According to Revenu Québec, a registered vendor bills and collects the GST and QST, then remits any amount of tax collected to Revenu Québec; amounts collected are deemed to be held in trust. So calculate margin and markup on the price before tax, then add GST (5%) and QST (9.975%) to the client's price.
Go further
Official sources
- Basic Rules for Applying the GST/HST and QST (opens in a new tab)Revenu Québec: GST of 5% on the price, QST of 9.975% on the price excluding the GST
- Collecting GST and QST (opens in a new tab)Revenu Québec: the vendor bills, collects and remits any amount of tax collected
This is general information, not tax or legal advice. Check with your accountant.
Frequently asked questions
Yes. A $100.00 cost with a 25% markup gives a $125.00 price. The $25.00 profit is 25% of the cost, but 20% of the selling price. The formula: margin = markup ÷ (1 + markup), so 0.25 ÷ 1.25 = 0.20.
Markup compares the profit to the cost; margin compares the same profit to the selling price. Since the price is larger than the cost, the margin is always smaller than the markup for the same profit.
Divide the cost by (1 − margin). For a 30% margin on a $1,000.00 cost: $1,000.00 ÷ 0.70 = $1,428.57. The common mistake, multiplying the cost by 1.30, gives $1,300.00 and a margin of only 23.08%.
No. Doubling the cost is a 100% markup, and a 50% margin. A 100% margin is impossible: it would take a $0 cost. That's why the calculator refuses a margin of 100% or more.
Before tax. Revenu Québec states that a registered vendor collects the GST and QST and remits any amount of tax collected; any amount of GST or QST collected is deemed to be held in trust. Calculate the margin on the price before tax, then add GST of 5% and QST of 9.975%.
ORYX Console
The right price, then the signed quote.
The management software from ORYX Gestion Inc., built in Quebec for service businesses:
- Line-by-line quotes, with GST and QST calculated
- Clients sign the quote online, from their phone
- Automatic follow-ups on sent quotes, at 2, 7 and 14 days