Running a business
Markup and margin calculator
The two get confused constantly, and it costs money.
A starting point, not tax advice. Nothing you type leaves your browser.
How this works
What the number means
Markup is measured against your cost. Margin is measured against your selling price. A 40% markup is not a 40% margin, and quoting as though it were is one of the most common ways a small business quietly underprices itself.
A 50% markup on $100 gives a $150 price and a 33.3% margin. To actually earn a 50% margin you need a 100% markup and a $200 price.
Worked example. On $100 of cost, a 40% margin needs a price of $166.67 — a 66.7% markup. Charging a 40% markup instead gives $140 and a margin of 28.6%.
Sources
- Plain arithmetic. No published rate is involved.
Rates change. The CRA page is the authority, and these are reviewed every January.
Questions
What does it cost?
It depends on how many transactions you have, how many people you pay and how complex the year-end is. There is no charge for the first consultation, and you can ask what a piece of work will cost before you commit to it.
Next step
Want someone to check the real figure?
A calculator estimates. A consultation answers for your actual situation. The first one is free.