Rates & sources
UK company rates (Corporation Tax, VAT, payroll NI) as published by HMRC and Companies House.
Source: HMRC — Running a business — figures refreshed at the start of each tax year.
When to use this calculator
- Before pricing a job, setting margin targets, or reviewing hiring costs.
- When you want to test sensitivity around volume, VAT, markup, or overhead changes.
- When you need a practical estimate before committing to a budget or proposal.
- When you are modelling break-even volume and want to see how it shifts as overheads or prices change.
- When you are preparing a quote and need to verify that the margin holds after materials, labour, and VAT are accounted for.
A realistic New Zealand planning example
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Cost Price (£)
NZ$0.30
Markup (%)
30
After entering these figures, focus on result first and then rerun the tool with a more cautious assumption to understand the realistic range of outcomes rather than relying on a single estimate.
How to read your results
Result
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Method & assumptionsAuthoritative sources
Markup is calculated as: (Selling Price − Cost) ÷ Cost × 100. To find a selling price from a desired markup, multiply the cost by (1 + markup rate). This is distinct from margin, which divides profit by selling price. The calculator lets you work in either direction: enter a cost and desired markup to find your selling price, or enter cost and selling price to find the implied markup.
UK businesses should work on VAT-exclusive figures wherever possible, as VAT collected is not part of your trading profit. The calculator does not include overheads in the cost figure — if you want to price for full-cost recovery, you will need to allocate a share of fixed costs to each unit before entering the cost. For businesses subject to Making Tax Digital, your accounting software should track margins at line-item level to support accurate reporting.
Common mistakes
- !Using optimistic assumptions without testing a more cautious scenario as well.
- !Comparing outputs from different tools without checking that the inputs match.
- !Treating the result as a final quote instead of a planning estimate.
- !Forgetting to include employer National Insurance contributions when modelling the true cost of a new hire.
- !Using revenue figures in place of gross profit when calculating margin percentage, which produces a misleadingly high result.
What to do next
- Try at least one more scenario with a lower price or higher cost so you can see the margin floor.
- Use the related calculators below to cross-check VAT, payroll, or break-even figures from another angle.
- Open one of the linked guides if you need more context before you finalise a quote or budget.
- If the margin is tighter than expected, identify which single input has the biggest impact and focus any negotiation there first.
- Keep a record of the assumptions behind this estimate so you can revisit and update it when costs or volumes change.
Frequently asked
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End-of-article next steps
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