How do I calculate markup percentage?

Markup percentage is calculated as (Selling Price - Cost Price) / Cost Price x 100. For example, if an item costs £40 and sells for £60, the markup is 50%.

What is a typical markup for UK retail businesses?

UK retail markups vary widely by industry. Clothing often uses 100-300% markup, food retail around 25-50%, and electronics typically 10-30%. The right markup depends on your market and overheads.

How does VAT affect markup calculations?

In the UK, VAT at 20% is added on top of your selling price. Calculate your markup on the ex-VAT price first, then add VAT separately to avoid squeezing your profit margin.

Markup Calculator UK | CalculatorZone

Useful next calculations

Use the Profit Margin CalculatorContinue with the related business & freelance question this result raises.
Use the VAT CalculatorContinue with the related business & freelance question this result raises.

Rates and sources

UK company rates (Corporation Tax, VAT, payroll NI) as published by HMRC and Companies House.

Source: HMRC — Running a business. Check the linked guidance and any live quote before acting.

When to use this calculator

Before pricing a job, setting margin targets or reviewing hiring costs.
When you want to test sensitivity around volume, tax, markup or overheads.
When you need a practical estimate before committing to a budget or proposal.
When you are modelling break-even volume as costs or prices change.

A worked example

These are the example figures the calculator opens with.

A worked example
Input	Value
Cost Price (£)	£50
Markup (%)	30%

For those figures the calculator returns:

Selling price: £65.00
Cost price: £50.00
Markup amount: £15.00
Gross margin: 23.08%

Method & assumptions

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.
Using revenue in place of gross profit when calculating margin.
Treating the result as a final quote instead of a planning estimate.
Forgetting employer on-costs when modelling the true cost of a hire.

What to do next

Try at least one more scenario so you can compare a realistic range.
Use the related calculators below to cross-check the decision from another angle.
Write down the key outputs from your best scenarios before you decide.
If the result surprises you, change one input at a time to isolate the driver.

Questions people ask

Markup is the percentage added to cost price to get the selling price, while margin is the percentage of the selling price that is profit. A 50% markup equals a 33.3% margin.