Pricing Calculator — Methodology

Step-by-step calculation

Set the optimal selling price from cost and your target margin or markup, with region-appropriate VAT or sales tax.

1. 1

   Choose margin-mode or markup-mode

   Pick whether you want to price by target gross margin (% of selling price) or by markup (% added to cost).

2. 2

   Enter your cost price

   Fully-loaded cost: materials, direct labour, plus any per-unit overhead allocation.

3. 3

   Set your target margin or markup

   Enter the percentage you want to achieve in the toggle's active field.

4. 4

   Set the VAT or sales tax (optional)

   Pre-filled by region — UK 20%, SA 15%, US 0% by default. Override if your situation differs.

5. 5

   Read both ex-tax and inc-tax prices

   The calculator shows the recommended price before and after tax, plus profit per unit.

Assumptions and overrides

VAT/sales tax defaults pre-fill at 20% (UK), 15% (SA), and 0% (US — sales tax varies by state). Verify your specific state's rate for US business.

Every region default on the calculator is editable. If your effective rate, fee, or threshold differs from the headline figure shown, type your own number into the field — the calculator recomputes instantly without leaving this page.

Primary sources

Region-tagged primary sources for the default rates, thresholds, and benchmarks used in this calculator.

• USAIRS — Sales and Use Tax (US varies by state)
• UKGOV.UK — VAT rates (UK standard 20%)
• SASARS — Value-Added Tax (SA standard 15%)

Review cadence and corrections

This methodology and the underlying rate defaults are reviewed at least annually, and immediately following any change to the headline rate from IRS, HMRC, or SARS. Every substantive update is recorded on the public changelog. Spotted an error? See the corrections policy for how to report it.

See the full editorial policy for the standards every page on BusCalcTools is held to.