Profit margin calculator
Calculate Profit, Margin, VAT, and Fees
Estimate net revenue, total costs, profit margin, markup, and a practical break-even selling price.
VAT/GST is shown separately and is not counted as an operating cost in this estimate.
How the profit margin calculator works
Enter your selling price and the costs attached to one sale. The calculator separates VAT or GST where applicable, estimates payment and marketplace fees, totals operating costs excluding VAT/GST, and compares the remaining profit with revenue and product cost.
Profit margin vs markup
Profit margin expresses profit as a percentage of net revenue. Markup expresses profit as a percentage of product or service cost. They answer different pricing questions, so the percentages are usually not the same.
How VAT/GST affects profit
If the selling price includes VAT or GST, the tax portion is removed to find revenue excluding tax. If the price excludes tax, the entered selling price is treated as net revenue and the tax amount is shown separately. In both modes, the estimate treats VAT/GST as tax separated from revenue rather than as an operating cost.
How payment and marketplace fees affect profit
Percentage fees are calculated from the selling price, while a payment fixed fee is added once. Fee rules vary by provider, country, account, payment method, and marketplace, so use values from your own current terms.
Example calculation
For a 100.00 selling price excluding VAT at 20%, the calculator shows 20.00 VAT separately. With a 40.00 product cost, 5.00 shipping, a 2.9% payment fee plus 0.30 fixed fee, and no other fees, operating costs excluding VAT are 48.20. Profit is 51.80, profit margin is 51.8%, and markup on product cost is 129.5%.
Formulas
VAT-inclusive net revenue: Selling price ÷ (1 + VAT rate ÷ 100).
VAT-exclusive tax: Selling price × VAT rate ÷ 100.
Payment fee: Selling price × payment fee percentage ÷ 100 + fixed fee.
Marketplace fee: Selling price × marketplace fee percentage ÷ 100.
Total costs: Product or service cost + shipping + payment fee + marketplace fee + other costs.
Profit: Net revenue − total costs.
Profit margin: Profit ÷ net revenue × 100.
Markup: Profit ÷ product or service cost × 100.
FAQ
What happens when product cost is zero?
Profit can still be estimated, but markup is unavailable because dividing by zero is not meaningful.
What happens when net revenue is zero?
The calculator still shows costs and profit, but profit margin is unavailable.
Is VAT/GST included in total costs?
No. This estimate separates VAT/GST from revenue and reports operating costs independently. Check how tax rules apply to your business and transactions.
Is the break-even price exact?
It is an estimate based on the entered fixed costs, percentage fees, and VAT treatment. It does not model tiered fees, tax-on-fee rules, refunds, discounts, or changing costs.
Are the fee values official provider rates?
No. Enter the current fees that apply to your specific account and transaction.
Related tools
Calculate tax with the VAT/GST calculator, combine tax and conversion with the VAT + currency calculator, or estimate processing costs with the payment fee calculator.