Margin calculator
Calculate how much margin your sales leave, or which selling price achieves your target margin percentage. The calculator also shows the markup percentage, which is often used in pricing instead of margin.
- Gross profit
- 40.00 €
- Margin percentage
- 40 %
- Markup percentage
- 66.667 %
Tilit AI
See your margin in real time
Tilit records sales and purchases automatically and calculates profitability ratios from your bookkeeping, so you know your margin without spreadsheets.
- Income statement and balance sheet update as documents arrive
- Profitability ratios and how to interpret them
- Project-level profitability with cost centres
How the calculator works
Gross margin is the difference between the selling price excluding VAT and the purchase price or variable costs. The margin percentage shows how large a share of the selling price is margin.
The markup percentage relates the same margin to the purchase price. For example, selling a €60 product for €100 gives a 40% margin but a 66.7% markup.
With a target margin, the selling price is the purchase price divided by (1 – margin percentage). The price including VAT is obtained by adding the selected VAT to the price excluding VAT.
The calculator gives an indicative estimate and is not tax or investment advice. Check your own situation with an accountant or the Finnish Tax Administration. Find an accountant
Frequently asked questions
Margin is calculated from the selling price and markup from the purchase price. The same euro amount is therefore always a smaller percentage as margin than as markup. If you want a 40% margin, you need to add 66.7% to the purchase price.
Excluding VAT, if the business is VAT-registered. VAT on sales is not the business's income and VAT on purchases is deductible, so both prices are included in the margin calculation without VAT. If VAT on purchases cannot be deducted, use the price including VAT as the purchase price.
It depends on the industry and fixed costs. The margin must cover rent, salaries and other fixed costs and leave a profit. Compare your margin with businesses in your industry and track it monthly.
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