Margin with VAT calculator
Free · no sign-upWork out your real profit margin when the cost and price include VAT — the VAT is pass-through, so it's stripped out first.
VAT is money you collect for the tax office, not profit — margin is figured on the ex-VAT amounts.
Figure out your real profit margin when the cost and selling price both include VAT. VAT is pass-through money — you collect it and hand it to the tax office, so it isn't profit. This calculator strips VAT out of both numbers first, then shows the margin, markup and net profit on the ex-VAT amounts, plus the VAT you owe. Everything runs in your browser.
- ✓Correct margin on VAT-inclusive prices
- ✓Any VAT rate (12%, 20%, …)
- ✓Shows ex-VAT cost and price
- ✓Shows VAT payable on the value you added
- ✓Share the result with a link
Who it's for
- Pricing goods that are quoted VAT-inclusive
- Checking whether a marketplace price is actually profitable
- Explaining to a client why the margin isn't the markup
- Setting a price to hit a target margin
How it works
- 1Enter your cost and selling price.
- 2Set your VAT rate and whether the prices include VAT.
- 3Read the margin, markup and net profit.
- 4Check the VAT you'll owe.
Frequently asked questions
Why is margin calculated without VAT?+
VAT is not your money — you collect it on the sale and remit it to the tax office, and you reclaim the VAT you paid on the cost. Real profit is the difference between the ex-VAT price and the ex-VAT cost, so margin is figured on those.
How do I remove VAT from a price?+
Divide by 1 plus the rate. At 20%, the ex-VAT amount is price ÷ 1.20; at 12% it's price ÷ 1.12. This tool does it for both the cost and the price automatically.
What does 'VAT payable' mean here?+
It's the VAT on the value you added — the VAT charged on the sale minus the VAT you already paid on the cost. That's the amount that goes to the tax office.
My prices don't include VAT — can I still use this?+
Yes. Untick “Prices include VAT” and the cost and price are treated as net figures; the tool then shows the VAT that would be added on top.
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