Markup vs Margin Calculator (Free, Australia)
For AU business owners and tradies who need to price jobs and products correctly: instantly see margin, markup and profit per unit from cost and sell price.
Last updated 31 May 2026
Markup vs margin trips up more Australian business owners than almost any other pricing concept, and getting it wrong quietly erodes your profit on every sale. This free calculator takes your cost price and selling price and shows you margin, markup and profit per unit side by side, so you can see exactly what each figure means for your business. Markup is profit expressed against your cost; margin is profit expressed against your selling price. They are never the same number, and confusing them is how a job that looks like it earns 50 per cent ends up returning far less. Whether you run a trade business, a retail shop, a cafe or a wholesale operation, this tool gives you clear, GST-aware numbers in seconds. Enter your figures, read the result, and price with confidence rather than guesswork.
How to use this tool
- 1
Enter your cost price
Type in what the item or job costs you to produce or buy in, before you add any profit. Use the GST-exclusive figure so your margin and markup reflect true earnings, not the tax you collect on the ATO's behalf.
- 2
Enter your selling price
Add the price you charge the customer, again GST-exclusive for a like-for-like comparison. If you only know the GST-inclusive price, divide it by 1.1 first to strip out the 10 per cent.
- 3
Read margin, markup and profit per unit
The calculator instantly returns all three: margin as a percentage of your sell price, markup as a percentage of your cost, and the dollar profit you keep per unit. Adjust either input to test different price points.
Markup vs margin: the difference that costs Australian businesses money
Markup and margin both measure profit, but against different bases, and that single distinction is where money leaks out. Markup is your profit divided by your cost. Margin is your profit divided by your selling price. Take an item that costs you $40 and sells for $70. Your profit is $30. As a markup that is $30 on $40, or 75 per cent. As a margin that is $30 on $70, or 42.9 per cent. Same job, same dollars, two very different percentages. The danger is mental shortcuts. Plenty of owners apply a 50 per cent markup believing they are banking a 50 per cent margin. They are not: a 50 per cent markup is only a 33.3 per cent margin. Over hundreds of invoices, that gap is the difference between a healthy year and a tight one. Suppliers and trade desks usually quote in markup, while accountants, lenders and your profit and loss statement think in margin, so you constantly translate between the two. A reliable rule: markup is always the larger number, because cost is smaller than sell price. If someone quotes you a margin and a markup that look identical, something is wrong. Use this calculator to convert instantly rather than estimating in your head. Knowing both figures means you can talk pricing with suppliers in their language and report performance to your accountant in theirs, without accidentally underpricing every quote you send.
Always work GST-exclusive when you set prices
GST distorts margin and markup if you let it creep into the calculation. The 10 per cent Goods and Services Tax you add to most sales is not your money: if you are registered for GST (compulsory once your turnover hits $75,000, or $150,000 for non-profits), you collect it from the customer and remit it to the ATO on your Business Activity Statement. It should never be counted as profit. The clean approach is to calculate margin and markup on GST-exclusive figures throughout. If your item costs $40 plus GST and you sell it for $77 including GST, do not divide $37 of apparent profit by anything: strip the GST first. The GST-exclusive sell price is $77 divided by 1.1, which is $70. Now your true profit is $70 minus $40, or $30, giving the correct 42.9 per cent margin and 75 per cent markup. Where it gets subtle is input tax credits. Because you claim back the GST you pay on the $40 cost, your real cost is $40, not $44. Calculating on GST-inclusive numbers double-counts tax on both sides and produces a margin that looks plausible but is wrong. Keep your accounting software set to display ex-GST on quotes and reports, enter ex-GST figures into this calculator, and add the 10 per cent only at the final invoice line. That discipline keeps your pricing decisions clean and your BAS reconciliation painless.
Build your true cost before you calculate markup
Markup and margin are only as honest as the cost figure you feed them, and many Australian businesses understate cost by leaving out the things that quietly consume profit. For a product, true cost is more than the supplier invoice: include freight, customs and duty on imports, payment processing fees, packaging and any wastage or shrinkage. For a service or trade job, cost is dominated by labour, and labour is more than the hourly wage. When you cost an employee's time, load the wage with superannuation, currently 11.5 per cent and legislated to rise to 12 per cent from 1 July 2025, plus payroll tax if your wages exceed your state threshold, workers compensation insurance, leave entitlements under the relevant Fair Work award, and non-billable hours such as travel, quoting and admin. A tradesperson on $40 an hour can cost you $60 or more once all of that is loaded in. If you mark up only the bare wage, your real margin collapses. The AU financial year runs 1 July to 30 June, so review your true costs annually as award rates, the super guarantee and supplier prices shift. Recalculate your standard markups each July rather than carrying last year's numbers forward. Feed the fully loaded cost into this calculator, and the margin it returns will match what actually lands in your bank account, not an optimistic figure that ignores the cost of doing business in Australia.
From spreadsheet pricing to automated quoting
Calculating markup and margin one product at a time is fine when you are checking a single price, but it does not scale. Most growing Australian businesses end up with a sprawling pricing spreadsheet that someone updates by hand whenever a supplier raises costs, an award rate changes, or the super guarantee ticks up. Every manual edit is a chance to apply the wrong percentage, miss a GST adjustment, or quote from a stale cost, and those small errors compound across hundreds of quotes a year. The pattern we see repeatedly is a business owner who knows their target margin but cannot enforce it consistently, because pricing lives in spreadsheets, supplier emails and people's heads. The fix is to connect your cost data, your margin rules and your quoting tool so prices recalculate automatically the moment a cost changes, and every quote that goes out is locked to the margin you actually want. That is exactly the kind of repetitive, error-prone, money-losing process Clever Ops automates for mid-market AU businesses. If you find yourself rebuilding this calculation in a spreadsheet every week, that is a signal worth acting on. Book a free assessment and we will map where pricing leaks out and what it would take to make correct margins automatic across your business.
Worked example
A Brisbane supplies business prices a single product. They buy it in at $40 ex-GST per unit and sell it for $70 ex-GST.
- Cost price (ex-GST)
- $40.00
- Selling price (ex-GST)
- $70.00
Profit per unit: $30.00. Margin: 42.9%. Markup: 75.0%.
The $30 profit is 75 per cent of the $40 cost (markup) but only 42.9 per cent of the $70 sell price (margin). An owner who assumed 'I marked it up 75 per cent so I keep 75 per cent' would badly overstate earnings. On the customer invoice, GST is added at the end: $70 plus 10 per cent equals $77 inc-GST, with the $7 remitted to the ATO and never counted as profit.
Who uses this tool
Electrician or plumber quoting jobs
A tradie buys materials at trade-desk prices quoted in markup, then needs to know the actual margin on a job once labour and super are loaded in. They enter true cost and quoted price to confirm the job clears their target margin before sending the quote.
Retail or e-commerce store owner
A shop owner receives a supplier price list in GST-inclusive figures and wants shelf prices that hit a 45 per cent margin. They strip GST, enter cost and sell price, and read back the markup to apply consistently across the range.
Wholesaler or distributor
A distributor negotiates volume pricing and needs to translate between the markup their suppliers quote and the margin their accountant reports on the P and L. They use the calculator to check both numbers agree before locking in a contract price.
Frequently asked questions
What is the difference between markup and margin?
Markup is your profit divided by your cost price; margin is your profit divided by your selling price. They describe the same dollar profit against different bases, so the percentages differ. An item costing $40 and selling for $70 has a 75 per cent markup but a 42.9 per cent margin. Markup is always the larger figure because cost is lower than sell price.
How do I convert markup to margin?
Divide the markup by one hundred plus the markup, then multiply by 100. A 50 per cent markup becomes 50 divided by 150, which is 33.3 per cent margin. A 100 per cent markup is a 50 per cent margin. This calculator does the conversion instantly when you enter cost and sell price, so you never have to do the arithmetic by hand or risk getting it wrong on a quote.
Should I use GST-inclusive or GST-exclusive prices?
Always use GST-exclusive figures. The 10 per cent GST you add to a sale is not profit; you collect it for the ATO and remit it on your BAS. If you only have the GST-inclusive price, divide it by 1.1 to strip the tax before calculating. Mixing inclusive and exclusive numbers produces a margin that looks right but overstates your true earnings.
What is a good profit margin for an Australian business?
It varies by industry. Trade services and professional firms often target 20 to 40 per cent net margin, hospitality runs leaner, and retail sits anywhere from 30 to 50 per cent gross. The right figure is whatever covers your overheads, super, tax and a fair return after costs. Rather than chase a benchmark, calculate your true loaded cost first, then set a margin that protects profit at your real volume.
Why does a 50 per cent markup not equal a 50 per cent margin?
Because they are measured against different numbers. A 50 per cent markup adds half your cost on top, so an item costing $40 sells for $60. The $20 profit on a $60 sell price is only 33.3 per cent margin. This is the single most common pricing error in Australian small business: assuming markup and margin are the same number quietly underprices every sale you make.
Does this calculator account for labour and super in my costs?
It calculates from whatever cost figure you enter, so you should build a fully loaded cost first. For a service or trade job, include the wage plus superannuation at 11.5 per cent (12 per cent from 1 July 2025), payroll tax if applicable, workers comp, leave under the relevant Fair Work award and non-billable time. Feed that true cost in and the margin returned will match your actual bank result.