VAT, Profit Margin & Markup Calculator: Free, No Sign-Up

How to Use VAT, Profit Margin & Markup Calculator

Enter your Cost Price and either your Selling Price (Net) or desired Gross Margin %.
Toggle the VAT rate (20% UK Standard, 5% Reduced, or Custom %) and choose whether your entered price includes or excludes VAT.
Instantly view Net Price, VAT Amount, Gross Price (Inc VAT), Gross Profit (£), Gross Margin (%), and Markup (%).

UK VAT Formulas & Profit Margin vs. Markup Explained

Confusing Gross Margin with Markup — or calculating reverse VAT incorrectly — is one of the fastest ways for e-commerce sellers and contractors to erode profit. Shoal's VAT, Profit Margin & Markup Calculator solves all three equations simultaneously in real time.

1. How to Add and Remove 20% UK VAT

Add 20% VAT (Net → Gross): Multiply the net figure by 1.20. (VAT = Net × 0.20).
Remove 20% VAT (Gross → Net): Divide the VAT-inclusive figure by 1.20 (or multiply by 5/6). Never subtract 20% directly from a gross price! For example, on £120 gross, the net price is £120 ÷ 1.20 = £100 (VAT is £20, not £24).

2. Profit Margin vs. Markup

Gross Margin %: ((Net Selling Price − Cost) ÷ Net Selling Price) × 100 — shows what percentage of revenue is profit.
Markup %: ((Net Selling Price − Cost) ÷ Cost) × 100 — shows how much you marked up your cost. A 50% markup on a £100 item gives a £150 selling price, which equals a 33.33% profit margin.

Frequently Asked Questions

How do I work out VAT backwards from a VAT-inclusive price?

For the 20% UK standard rate, divide the total gross price by 1.2 to get the net price ex-VAT. Subtract that net price from the gross total to find the exact VAT amount (or divide the gross price by 6).

What is the difference between a 50% markup and a 50% margin?

If an item costs £100, a 50% markup sells it for £150 (£50 profit, which is 33.3% of the selling price). To achieve a 50% gross margin on a £100 cost, you must sell it for £200.