Finance & business New Zealand
Markup Calculator
Enter a cost and either a markup, a margin or a price — the calculator fills in the rest. Markup and margin always appear together, because confusing the two is the most expensive mistake in small business pricing.
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For the display price only
Selling price, excluding GST
—Markup
—
Gross margin
—
Gross profit
—
Price incl. GST
—
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A $100 item sold for $150 carries a 50% markup and a 33.3% margin — the same dollar of profit, measured against two different bases. Margin can never reach 100%; markup has no ceiling.
Which one should you price on
Price on markup, budget on margin, and always know both.
Markup is the practical tool at the point of pricing, because it works forward from the number you already have. Cost is known; markup gives you the price directly.
Margin is the number that matters everywhere else. Financial statements report gross margin. Break-even calculations use margin. Advertising return is judged against margin. Every conversation about whether the business is working happens in margin.
The failure mode is using one consistently and reporting in the other without converting, which quietly overstates profitability across the whole catalogue.
That is why both figures appear in every result on this page rather than only the one you asked for.
GST, and keeping it out of the calculation
GST in New Zealand is 15 per cent, and it is not revenue. You collect it on behalf of Inland Revenue and pay it across, so it should never appear in a margin calculation.
Work the whole pricing calculation in GST-exclusive figures — cost excluding GST, price excluding GST — and add GST only at the end to get the shelf price. Mixing a GST-inclusive price with a GST-exclusive cost inflates the apparent margin by a large and entirely fictional amount.
The GST-inclusive figure in the result is there for the price tag. Every percentage on this page is calculated on the exclusive figures.
How this is calculated
Both percentages measure the same dollar of profit. They differ only in what they divide it by.
markup % = (price − cost) ÷ cost × 100margin % = (price − cost) ÷ price × 100price from markup = cost × (1 + markup ÷ 100)price from margin = cost ÷ (1 − margin ÷ 100)converting: margin = markup ÷ (1 + markup) · markup = margin ÷ (1 − margin)price including GST = price × (1 + GST ÷ 100)
The two conversion identities are worth committing to memory, because they explain why the numbers feel wrong at first. A 100% markup is a 50% margin. A 50% markup is a 33.3% margin. A 33.3% markup is a 25% margin.
Margin approaches but never reaches 100%, because profit can never exceed the price it is measured against. Markup has no upper limit at all — a $1 item sold for $20 carries a 1,900% markup and a 95% margin.
A worked example: the same item priced two ways
An item costs $100 excluding GST. Compare pricing it at a 50% markup with pricing it at a 50% margin.
- At a 50% markup — 100 × 1.5$150.00
- Gross profit$50.00
- Margin achieved — 50 ÷ 15033.3%
- At a 50% margin — 100 ÷ 0.5$200.00
- Gross profit$100.00
- Markup that represents100%
A 50% markup gives $150 and a 33.3% margin. A 50% margin needs $200 — twice the gross profit.
Pricing a whole catalogue at a 50% markup while budgeting on a 50% margin leaves a third of the expected gross profit missing. It is a quiet failure, because every individual price looks reasonable.
What this calculator does not do
- Gross margin only — it excludes overheads, wages and other operating costs
- Assumes cost is the true landed cost including freight and duty where applicable
- Does not model discounting, volume pricing or promotional periods
- GST handling is for display pricing and is not tax advice
Common questions
What is the difference between markup and margin?
Markup measures profit against cost; margin measures it against the selling price. A $100 item sold for $150 is a 50% markup and a 33.3% margin. Same dollar of profit, two different denominators.
How do you calculate a 30% markup?
Multiply the cost by 1.3. A $80 cost becomes $104. That is a 23.1% margin, which is the figure to use if you are reporting or budgeting.
How do I convert margin to markup?
Divide the margin by one minus the margin. A 40% margin is 0.4 ÷ 0.6 = 66.7% markup. Going the other way, a markup of 66.7% is 0.667 ÷ 1.667 = 40% margin.
Should GST be included in the markup calculation?
No. Work in GST-exclusive figures throughout and add the 15% only to produce the shelf price. GST is collected on Inland Revenue's behalf and is not part of your revenue or your margin.
Can margin be more than 100%?
No. Margin is profit as a share of price, so it approaches 100% but never reaches it. Markup has no ceiling — an item costing $1 and selling for $20 is a 1,900% markup.
Where these numbers come from
- Inland Revenue — GST rate in New Zealand GST is 15% and is excluded from margin calculations
- Standard accounting — gross margin and markup Fixed definitions
Method last reviewed 2026-10-28 This calculator uses fixed rules rather than rates that change, and its method is re-checked against the sources above at least once a year. Out of date? Tell us and we will fix it.
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