Price is before any sales tax, VAT or GST. Check it against competitors: if it is far higher, look for ways to lower costs or add value.
The tax percentage is your own rough estimate, not a tax calculation.
Margin and markup at a glance
| Markup on cost | Same as margin | Item costing $10 sells for |
|---|---|---|
| 25% | 20.0% | $12.50 |
| 50% | 33.3% | $15.00 |
| 100% | 50.0% | $20.00 |
| 150% | 60.0% | $25.00 |
| 200% | 66.7% | $30.00 |
Maths: margin = markup ÷ (1 + markup). Read markup vs margin explained.
Frequently asked questions
How do I price a product?
Start with your full cost per item: materials or product cost, packaging, shipping you pay and any per-sale fees. Then add the profit you want, either as a margin (a share of the price) or a markup (a share of the cost). Finally, compare the result with what competitors charge.
What is the difference between markup and margin?
Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. An item that costs $10 and sells for $15 has a 50% markup but a 33.3% margin. See markup vs margin.
How do I set an hourly rate?
Add the yearly income you want to the yearly cost of running the business, allow for tax, then divide by the hours you can actually bill. Billable hours are usually far fewer than hours worked, because admin, marketing and travel are unpaid.
Does the calculator include tax?
The product price is before any sales tax, VAT or GST you collect from customers. The hourly calculator lets you set aside a percentage for income tax. Ask a tax professional or your tax authority for your actual rate.