Free margin calculator: selling price, markup and break-even point
Enter your product’s cost and the margin you want, and get the selling price with and without VAT, the markup and how many units you need to sell each month.
Selling price
$10
$6 ÷ (1 − 40%) = $10
Margin
40%
Price with VAT
$12
Profit per unit
$4
Markup (on cost)
66.7%
Break-even point
200 units a month
$2,000 in sales before VAT
Margin: how much of the price is profit. Markup: how much you add to the cost. A 50% markup equals a 33.3% margin. For reference only: it does not include income tax, fees or discounts.
Frequently asked questions about the margin calculator
What is a margin calculator?
A margin calculator is a tool that tells you what price to charge for a product to earn the percentage you want, or how much you earn with the price you already have. This margin calculator also works out the markup and your business’s break-even point.
How do you calculate the selling price from cost and margin?
Divide the cost by (1 − margin). For example, if a product costs you CLP 6,000 and you want a 40% margin, the price is 6,000 ÷ 0.6 = CLP 10,000. A common mistake is adding 40% to the cost: that gives CLP 8,400, and your real margin would be only 28.6%.
What is the difference between margin and markup?
Margin is the share of the price that is profit: (price − cost) ÷ price. Markup is how much you add to the cost: (price − cost) ÷ cost. With a cost of CLP 6,000 and a price of CLP 10,000, the margin is 40% and the markup is 66.7%. That is why a 50% markup equals a margin of only 33.3%.
What is the break-even point?
It is the number of units you must sell each month to cover your fixed costs, such as rent and salaries. It is calculated by dividing fixed costs by the profit on each unit. With fixed costs of CLP 800,000 and a profit of CLP 4,000 per unit, you need to sell 200 units a month.
Should the price include VAT?
The margin calculator works with amounts before VAT, because VAT is not profit: you pay it to the tax authority. If you turn on the option, it also shows the price with Chile’s 19% VAT, which is what your customer sees. To add or remove VAT from any amount, use our VAT calculator.
Is the margin calculator free?
Yes. It is free, requires no sign-up and runs in your browser: amounts are not sent to any server. The result is for reference only and does not consider income tax, fees or discounts. Find more guides in the Business & innovation section.