Guidance only — always verify against current standards and manufacturer instructions.
The TradePlanr app puts this calculator — plus gas & electrical certificates, quoting, invoicing and job sign-offs — on your phone, working even with no signal. Free to start — works in your browser, no download needed.
This calculator turns a net cost into a sell price. Enter what the materials or job cost you (excluding VAT), the markup percentage you want to apply, and the VAT rate, and it returns your profit, the sell price excluding VAT and the sell price including VAT.
It is for tradespeople pricing materials on quotes and invoices: you have bought parts at trade price and need to know what to charge the customer so the markup covers your handling, collection time and risk — and what the final VAT-inclusive figure on the invoice will be.
The calculation applies markup first to get your net sell price, then adds VAT on top of that. Profit is the difference between your net sell price and your cost — VAT is never profit, because you pass it on to HMRC.
Sell (ex VAT) = cost × (1 + markup% ÷ 100); Sell (inc VAT) = sell (ex VAT) × (1 + VAT% ÷ 100)
Markup is applied to your net cost first: £240 cost at 20% markup gives a net sell price of £288. VAT is then added on top of the marked-up price at the rate you enter: at 20% VAT the gross price is £345.60. Profit is the net sell price minus your cost — £48 in this example — and does not include the VAT, which you collect for HMRC.
Type what the materials or job cost you in pounds, excluding VAT. If you are VAT registered you reclaim the VAT on purchases, so the net trade price is your true cost.
Enter the markup percentage you want to apply to that cost. The default is 20%. This is markup on cost, not profit margin on the sale — see the guidance below for the difference.
Enter the VAT rate to add on top of the marked-up price. The default is 20%, the UK standard rate. Change it if a different rate applies to the work, or set it to 0 if you are not VAT registered.
The calculator shows your profit in pounds, the sell price excluding VAT (what you keep before overheads) and the sell price including VAT (what goes on the customer's invoice).
Markup and margin are not the same thing, and mixing them up is one of the most common pricing mistakes in the trades. Markup is profit as a percentage of cost; margin is profit as a percentage of the sell price. A 20% markup on £240 gives £48 profit on a £288 sale — which is only a 16.7% margin. If your accountant tells you the business needs a 20% margin, you need a 25% markup to achieve it. This calculator works in markup on cost.
The VAT field defaults to 20%, the UK standard rate, but it is free entry — use whatever rate applies to the job. If you are not VAT registered, set it to 0 and the ex-VAT and inc-VAT figures will be the same. Remember that VAT you charge is not income: you collect it and pay it over to HMRC, which is why the calculator reports profit on the net figures only.
This is a pricing aid, not accounting or tax advice. Your markup needs to cover more than the materials themselves — collection time, delivery, wastage, warranty risk and the cost of carrying stock all come out of it before anything reaches your bottom line. Check current VAT rules and rates with HMRC or your accountant, especially for work that may qualify for a reduced or zero rate.
Markup is profit as a percentage of what an item cost you; margin is profit as a percentage of what you sell it for. A £100 part sold at 20% markup goes for £120, giving £20 profit — but that £20 is only 16.7% of the £120 sale, so the margin is 16.7%. To achieve a 20% margin you would need a 25% markup.
Multiply the net price by 1.2. A net sell price of £288 becomes £345.60 including VAT at 20%. To go the other way and strip 20% VAT out of a gross price, divide by 1.2 — do not subtract 20%, which gives the wrong answer.
There is no single right figure — common practice ranges roughly from 10% to 30% depending on trade, item value and how much handling is involved. The markup needs to cover sourcing time, collection or delivery, wastage and warranty risk, not just add profit. Work out what those genuinely cost you and set the percentage from there.
Yes, if you are VAT registered. VAT is charged on your full selling price, which means the marked-up price — not your original cost. That is the order this calculator uses: markup is applied to the net cost first, then VAT is added to the marked-up figure. If you are not VAT registered, you do not charge VAT at all — set the VAT field to 0.
It is calculated on the net figures: profit = sell price ex VAT minus your net cost. VAT never counts as profit because you pass it on to HMRC. The profit shown is gross profit on the item — your overheads, tax and labour still have to come out of it.
TradePlanr Agency builds custom-coded, SEO-optimised websites and runs Google Ads for UK trades — from £375, by the team behind TradePlanr.
Explore TradePlanr Agency