Useful next calculations
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.
| Input | Value |
|---|---|
| Revenue (£) | £50,000 |
| Total Costs (£) | £35,000 |
For those figures the calculator returns:
- Profit: £15,000.00
- Margin: 30.00%
- Markup: 42.86%
Method & assumptions
This calculator works on the standard gross profit margin formula: (Revenue − Cost of Goods Sold) ÷ Revenue × 100. Enter your sales revenue and the direct costs associated with producing or delivering your product or service. Direct costs typically include raw materials, stock purchased for resale, and any labour directly tied to production. The calculator does not factor in overheads such as rent, insurance, or administrative salaries — those belong in a net profit calculation.
UK businesses should enter VAT-exclusive figures if VAT-registered. Sole traders and limited companies may have different allowable cost definitions under tax authority rules, so consult your accountant when classifying costs for tax purposes. Use this tool for quick decision-making and pricing reviews rather than as a substitute for formal management accounts.
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.