In the U.S. prices are usually shown before sales tax, which is added at checkout. Your margin is calculated on the net price – sales tax is collected for the state, not income.
How to use the Margin and Sales Tax Calculator
- Cost
- Pricing by
- Margin / markup
- Sales tax
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the cost, choose margin or markup and its percentage, and the sales tax rate.
Tips
- Know the difference between margin (profit ÷ price) and markup (profit ÷ cost).
- Apply successive discounts one after another – they do not simply add up.
- Check whether prices already include sales tax or VAT.
- Round prices only at the very end of the calculation.
Common mistakes to avoid
- Adding discount percentages together.
- Pricing from a target margin using the markup formula.
- Forgetting payment-processing and shipping fees.
Inputs explained
| Field | What to enter |
|---|---|
| Cost | Amount in your currency |
| Pricing by | Choose one: Margin, Markup |
| Margin / markup | In % |
| Sales tax | In % |
What each result means
- Sales tax = [Net price (before tax)]×[Sales tax]÷100
- Gross price (with tax) = [Net price (before tax)] + [Sales tax]
- Profit = [Net price (before tax)] – [Cost]
- Margin = [Profit]÷[Net price (before tax)]×100
- Markup = [Profit]÷[Cost]×100
Example values
How the main result changes when Cost changes and everything else stays at the example values above:
| Cost | Gross price (with tax) |
|---|---|
| 20 | 33.31 |
| 30 | 49.96 |
| 40 | 66.62 |
| 50 | 83.27 |
| 60 | 99.92 |
| 80 | 133.23 |
Formula
Net price = cost ÷ (1 − margin) or cost × (1 + markup)Sales tax = net price × tax rateGross price = net price + sales taxProfit = net price − costWorked example
Inputs — Cost: $40; Pricing by: Margin; Margin / markup: 35 %; Sales tax: 8.25 %.
Results — Net price (before tax) = $61.54; Sales tax = $5.08; Gross price (with tax) = $66.62; Profit = $21.54; Margin = 35 %; Markup = 53.85 %.
Frequently asked questions
Is sales tax included in my margin?
No – margin is calculated on the price before tax.
Who pays sales tax?
The buyer; the seller collects and remits it.
How do I price to include tax?
Add tax to the net price; in the U.S. it's usually added at checkout.
What formula does the Margin and Sales Tax Calculator use?
Net price = cost ÷ (1 − margin) or cost × (1 + markup).