How this calculator works
Margin is profit as a share of the selling price. Markup is profit as a share of cost. Mixing them up is one of the most common pricing mistakes in small businesses.
Pick what you know (a price, a target margin or a markup) and the calculator fills in the rest, including the price with GST.
Formula
Worked example
A product costing ₹640 sold at ₹999 has a profit of ₹359: a 35.9% margin but a 56.1% markup. A shop that adds a 35% markup expecting a 35% margin actually earns 25.9%.
Things to watch
- Set prices from a target margin, because your costs and fees are a share of the price, not of cost.
- Margin can never reach 100%; markup can be any number.
- Use prices before GST so the margin is not inflated by tax you pass on.
Questions
What is the difference between margin and markup?
Both use the same profit. Margin divides it by the price; markup divides it by the cost. A 50% markup equals a 33.3% margin.
How do I convert markup to margin?
Margin = markup ÷ (1 + markup). A 25% markup is a 20% margin.
What gross margin should I aim for?
Online brands often need 60%+ gross margin to pay for ads, shipping and returns. Distributors work on 8–20%.
Does this include GST?
The margin is calculated before GST. The last line shows the price the customer pays with GST.
For planning and education only, not tax, legal or investment advice. Last reviewed 2026-10-31.