💰 Margin and VAT Calculator
Calculate price with margin and VAT
Cost of goods or service (exclusive of VAT)
Desired profit margin percentage (before VAT)
VAT rate percentage (UK standard rate is 20%)
How to Use This Calculator
Enter Cost
Input the cost of goods or service (exclusive of VAT) - the amount you paid or spent.
Enter Desired Profit Margin
Enter your desired profit margin percentage. This is the profit as a percentage of the selling price before VAT.
Enter VAT Rate
Enter the VAT rate percentage for your location. UK standard rate is 20%. VAT is added to the price after calculating the margin.
Review Final Price
See the selling price before VAT, VAT amount, final price with VAT, and profit. Use this to price products with your desired margin and account for VAT.
Formula
Price Before VAT = Cost / (1 - Profit Margin%)
VAT Amount = Price Before VAT × VAT Rate%
Final Price = Price Before VAT + VAT Amount
Example Calculation:
If cost £60, margin 40%, VAT 20%:
• Price before VAT = £60 / (1 - 40%) = £100
• VAT amount = £100 × 20% = £20
• Final price = £100 + £20 = £120
About Margin and VAT Calculator
A margin and VAT calculator helps you calculate the selling price needed to achieve a desired profit margin while accounting for VAT (Value Added Tax). This calculator first calculates the price before VAT needed to achieve your desired margin, then adds VAT to get the final customer-facing price. This is essential for pricing products and services in VAT-registered businesses, ensuring you achieve your profit goals while properly accounting for VAT obligations.
When to Use This Calculator
- Product Pricing: Price products with desired margin and VAT
- Service Pricing: Price services with margin and VAT considerations
- Business Planning: Plan pricing strategies for VAT-registered businesses
- VAT Compliance: Ensure VAT is properly accounted for
Understanding Margin and VAT
- Profit Margin: Profit as a percentage of selling price (before VAT)
- VAT: Value Added Tax added to the selling price, paid by the customer
- Final Price: Price customer pays (includes VAT)
- VAT Registration: VAT-registered businesses collect VAT and remit it to tax authorities
Why Use Our Calculator?
- ✅ Accurate Pricing: Calculate prices with margin and VAT
- ✅ Profit Goals: Achieve desired profit margins
- ✅ VAT Compliance: Properly account for VAT
- ✅ Business Planning: Plan pricing strategies
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
How do I calculate price with margin and VAT?
To calculate price with margin and VAT: (1) Calculate price before VAT = Cost / (1 - Margin%), (2) Calculate VAT = Price Before VAT × VAT Rate%, (3) Final price = Price Before VAT + VAT. This calculator does all the calculations for you - just enter your cost, desired margin, and VAT rate.
Is VAT included in profit margin?
No, VAT is not included in profit margin. Profit margin is calculated as (Price - Cost) / Price, using the price before VAT. VAT is added separately after calculating the margin. VAT is collected from customers and remitted to tax authorities - it's not part of your profit.
How do I account for VAT in pricing?
VAT is added to the selling price after calculating your profit margin. First, calculate the price needed to achieve your desired margin (Price = Cost / (1 - Margin%)). Then, add VAT to that price (Final Price = Price + (Price × VAT Rate%)). This ensures you achieve your margin while properly collecting VAT from customers.
What's the difference between VAT and sales tax?
VAT (Value Added Tax) and sales tax are similar but have key differences. VAT is used in the UK, EU, and many other countries, while sales tax is used in the US. VAT is collected at each stage of production/distribution, while sales tax is collected only at the final sale. For pricing purposes, both are calculated the same way - as a percentage of the selling price added to the price.