BIZOMAT Tools · Money
Margin and Markup
What margin are you actually making?
Converts a cost and price into gross profit, gross margin (on price) and markup (on cost).
Open the calculatorRuns in your browser. No account needed.
How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Total cost / unit | $ | Total unit cost from costing or the quote build-up |
| Selling price / unit | $ | Selling price per unit, excluding GST |
What each input means
Open an input to see what it is, its units, the worked example and the common mistakes, with a small diagram.
What this means: Total cost / unit
- What it is
- Everything it costs to produce or buy one unit, including material, labour and the share of overhead your costing method assigns.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0 or more.
- Example
- The form opens with $60 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- A higher cost lowers gross profit, margin and markup.
- Get it right
- Use the fully loaded cost; using only material cost overstates margin.
What this means: Selling price / unit
- What it is
- The price you charge for one unit, excluding GST or other sales taxes collected for the government.
- Units and format
- Enter a number in $: an amount of money; use one currency for every money input. The form accepts $0.01 or more.
- Example
- The form opens with $100 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- A higher price raises gross profit, margin and markup.
- Get it right
- Enter the price without GST; tax collected on behalf of the government is not margin.
Method and formulas
- Gross profit = price − cost
- Gross margin = gross profit ÷ price
- Markup = gross profit ÷ cost
Limitations
- Only as complete as the cost entered
- Margin bands (30% and 10%) are general guides, not your pricing policy
Typical uses
- Checking product or job profitability
- Explaining margin versus markup
- Reviewing price lists
Who it is for
- Sales and estimating staff
- Business owners
What you get
- Margin band (healthy, thin, very low or loss)
- Gross profit, margin and markup
Interpreting the result
- A 30% markup is only a 23% margin; state which one you mean
- Compare with your pricing policy for the product or customer
Learn the Concepts Behind This Tool
These BIZOMAT Library readings explain the method this tool uses, with worked examples.
Method explained here · Library collection
Gross margin: the quickest test of pricing power
In Pricing, Margins and Profitability
What it covers: Why gross margin is often the first number to check when judging a business, what high and low margins usually signal, and how founders can design for healthy margins.
BIZOMAT tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.