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Margin calculator: markup vs margin, pricing from cost, and MRP
Markup is profit as a share of the cost; margin is profit as a share of the selling price. An item bought for ₹80 and sold for ₹100 before GST has a 25% markup and a 20% margin — the same ₹20, measured against two different numbers.
On an MRP item the GST is inside the price: take it out first (MRP × rate ÷ (100 + rate)), and what remains, less the cost, is your profit.
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Markup or margin: which is which
Markup is the profit measured against the cost. Margin is the same profit measured against the selling price. Because the price is bigger than the cost, a margin is always the smaller number. Mixing them up is the classic pricing slip: ask for a 20% margin, apply a 20% markup, and you earn 16.67%.
| Markup on cost | Margin on price |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20.00% |
| 33.33% | 25.00% |
| 50% | 33.33% |
| 100% | 50.00% |
To convert: margin = markup ÷ (100 + markup) × 100, and markup = margin ÷ (100 − margin) × 100. A 25% margin needs a 33.33% markup.
Price from what you paid
Start from the cost before GST — the figure on the supplier’s bill before tax, which is what the stock is worth — add the markup there, and put GST on top of the result. ₹80 plus 20% is ₹96; at 5% GST the shelf price is ₹100.80. Deciding the markup on a price that already includes tax makes “80 plus 20%” come out at a number nobody meant.
If you cannot claim back the GST you pay on purchases as input tax credit, that GST is part of your real cost. Ask your accountant which applies to you, and enter the cost accordingly.
MRP goods: the GST is already inside
An MRP includes GST, so the tax comes out of it, not on top: a ₹40 MRP at 5% holds 40 × 5 ÷ 105 = ₹1.90 of GST and ₹38.10 of price. Bought at ₹30, that item earns ₹8.10 — a 27% markup and a 21.26% margin, not the 33% that ₹40 − ₹30 suggests. Choose “Its MRP” above to work it out for any item.
When the same product arrives at different costs — ₹80 last month, ₹82 this week — each delivery has its own margin at the same shelf price. Knowing which one you sold is the difference between a margin you believe and one you actually made.
Prices that follow the cost, in Nivasik
- Prices from what you paid: a percentage added on the cost — a markup, so ₹80 + 20% is ₹96, a 16.67% margin — a flat amount on the cost, or the MRP with its tax taken apart correctly.
- Each delivery is a batch with its own cost and expiry, so a sale knows which cost it came from.
- Barcode labels, scanning, and selling by the piece or by the kilo.
Nivasik prices by markup on the cost, not by a target margin. If you think in margins, use “A margin” above to find the markup that gives it — a 20% margin is a 25% markup — and enter that.
All of this is part of the POS: ₹1,499 per outlet a month, on its own or with any plan, and free for 45 days to try.
Questions people ask
What is the difference between markup and margin?
Markup is profit ÷ cost; margin is profit ÷ selling price. Bought at ₹80 and sold at ₹100, the ₹20 profit is a 25% markup and a 20% margin.
How do I calculate the selling price from cost and margin?
Divide the cost by (100 − margin) and multiply by 100. ₹80 at a 20% margin is ₹80 ÷ 80 × 100 = ₹100 before GST.
How do I work out the profit on an MRP product?
Take the GST out of the MRP first: MRP × rate ÷ (100 + rate). What is left, minus what you paid before GST, is the profit. A ₹40 MRP at 5% bought for ₹30 earns ₹8.10.
Should the cost price include GST?
Use the cost before GST if you claim the GST on purchases back as input tax credit; if you cannot, the GST you paid is part of your cost. Your accountant can tell you which applies.
How do I convert markup to margin?
Margin = markup ÷ (100 + markup) × 100. A 50% markup is a 33.33% margin; a 100% markup is a 50% margin.
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Open the tool →Last reviewed 25 September 2026. The calculator does arithmetic; it is not tax or accounting advice.
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