Markup starts from cost; margin starts from selling price. Knowing which percentage you are using makes pricing conversations much easier.
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Let’s work it out.
The starting figures are illustrations, not industry benchmarks. Replace them with your own costs and assumptions. Calculations happen in your browser; figures are not saved to your account or sent as analytics properties.
Changes the display label only. It does not convert amounts. Use a consistent basis for tax-inclusive or tax-exclusive figures.
Your planning estimate
- Selling price with markup
- AUD 130.00
- Surplus above entered cost
- AUD 30.00
- Equivalent margin on price
- 23.08%
How this calculation works
Cost × (1 + markup percentage) gives selling price. Selling price minus cost gives surplus; divide that surplus by selling price to show the corresponding margin. A zero cost gives a zero price under this formula and no meaningful margin percentage.
A little more context: Hourly rate or project fee?.
How the calculation works
Cost × (1 + markup percentage) gives selling price. Selling price minus cost gives surplus; divide that surplus by selling price to show the corresponding margin. A zero cost gives a zero price under this formula and no meaningful margin percentage.
A worked example you can change
The tool starts with the illustrative figures below. They demonstrate the calculation; they are not industry averages, recommended rates or promises about what you will earn. All monetary figures in this example are AUD.
Cost allowance: 100 AUD Markup on cost: 30% Selling price with markup: 130 AUD Surplus above entered cost: 30 AUD Equivalent margin on price: 23.08%
Make the estimate fit your business work
The most useful estimate is one you can explain. Check these details against the actual job or business arrangement before you rely on the result.
- Choose a cost base that includes what the markup needs to recover.
- A markup calculation does not show whether customers will accept the resulting price.
- If your goal is a particular margin, use the quote or product calculators instead of entering that margin as a markup.
What this tool does and does not include
The calculation uses the figures you enter and the method above. It does not fetch market rates, convert currencies, assess demand or calculate tax, payroll or legal obligations. Choose a consistent tax basis for the amounts you enter. Changing display currency changes the label only.
Your inputs stay in this browser page and reset when you leave or reload. You can copy or download a text estimate with its assumptions. If you choose to use Lufu, you can then prepare an actual quote or invoice with the details you have agreed.