Free markup calculator
Setting the right price is key to running a profitable business. Accurately work out your sales prices with Xero’s markup percentage calculator. Feel confident you’re charging the right amounts to maximize your profits.
- A simple way to set your sales prices
- Automatic calculations save you time
- A PDF to keep on your desktop
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How to use Xero’s free markup calculator
To make a profit, you need to mark up your cost prices (what it costs you to produce your goods or services, including your materials and time). The higher the markup, the more profit you make – but set your sales prices too high and you’ll put off your customers. Xero’s practical markup calculator helps you add markups accurately. Just enter your cost price and the markup percentage on the right-hand side of the PDF, and the calculator works out the new selling price for you.
See Xero’s definition of ‘markup’To make a profit, you need to mark up your cost prices (what it costs you to produce your goods or services, including your materials and time). The higher the markup, the more profit you make – but set your sales prices too high and you’ll put off your customers. Xero’s practical markup calculator helps you add markups accurately. Just enter your cost price and the markup percentage on the right-hand side of the PDF, and the calculator works out the new selling price for you.
See Xero’s definition of ‘markup’Let’s say you already know your sales prices and want to check you’re in line with the industry standard markup. With the markup calculator, it’s simple: on the left-hand side of the PDF, enter your cost price and sales price to calculate the markup percentage. Say the industry standard is 25% and you discover your markup is only 20%. That’s good news: you might be able to increase your sales prices without dampening demand – and therefore make higher profits.
Let’s say you already know your sales prices and want to check you’re in line with the industry standard markup. With the markup calculator, it’s simple: on the left-hand side of the PDF, enter your cost price and sales price to calculate the markup percentage. Say the industry standard is 25% and you discover your markup is only 20%. That’s good news: you might be able to increase your sales prices without dampening demand – and therefore make higher profits.
Change is constant, so you need to keep reviewing, and possibly updating, your sales prices. Maybe your costs have risen, narrowing your margins, or a new competitor forces you to lower your prices to stay competitive. Xero’s markup calculator can help you change your prices quickly and accurately. Ask yourself: how much are your customers now willing to pay? What level of profit makes your business worthwhile to you? Then do your markup calculations to optimize your prices for your goals.
Change is constant, so you need to keep reviewing, and possibly updating, your sales prices. Maybe your costs have risen, narrowing your margins, or a new competitor forces you to lower your prices to stay competitive. Xero’s markup calculator can help you change your prices quickly and accurately. Ask yourself: how much are your customers now willing to pay? What level of profit makes your business worthwhile to you? Then do your markup calculations to optimize your prices for your goals.
FAQs on pricing markups
A markup is the amount you add to your cost prices, expressed as a percentage of the cost price, to form your sales price. The business markup formula is: (sales price – cost price) / cost price x 100 = markup percentage. For example, by adding $10 to your cost price of $30, your sales price is $40 and your markup is 33%. Xero’s markup calculator helps you do this quickly and accurately, so you can make a profit while staying competitive.
Here's how to calculate markupsA markup is the amount you add to your cost prices, expressed as a percentage of the cost price, to form your sales price. The business markup formula is: (sales price – cost price) / cost price x 100 = markup percentage. For example, by adding $10 to your cost price of $30, your sales price is $40 and your markup is 33%. Xero’s markup calculator helps you do this quickly and accurately, so you can make a profit while staying competitive.
Here's how to calculate markupsA markup of 100% means you’re effectively doubling your cost price. For example, if your cost price is $20, your sales price is $40. A 100% markup is a simple pricing strategy that’s quick to calculate – and makes you big profits. But you might price yourself out of the market, so apply this markup with caution!
A markup of 100% means you’re effectively doubling your cost price. For example, if your cost price is $20, your sales price is $40. A 100% markup is a simple pricing strategy that’s quick to calculate – and makes you big profits. But you might price yourself out of the market, so apply this markup with caution!
As concepts, markup and margin both look at the difference between your buying and sales prices. A markup represents the difference as a percentage of your costs (which you’d then use to set your prices). Your margin represents the difference as a percentage of your income – which you’d use to look at your past sales performance.
See more on markups versus marginsAs concepts, markup and margin both look at the difference between your buying and sales prices. A markup represents the difference as a percentage of your costs (which you’d then use to set your prices). Your margin represents the difference as a percentage of your income – which you’d use to look at your past sales performance.
See more on markups versus marginsAn ideal markup for your business depends on your offering and the conditions in your industry. So do your research: look at your industry's standard markups – these will vary based on location, business type, and goods and services being sold. Then think about market conditions (like competitor pricing and customer demand), and internal factors like your business’s overheads and profit goals.
An ideal markup for your business depends on your offering and the conditions in your industry. So do your research: look at your industry's standard markups – these will vary based on location, business type, and goods and services being sold. Then think about market conditions (like competitor pricing and customer demand), and internal factors like your business’s overheads and profit goals.
Absolutely. Let’s say your service is hairdressing. Work out your overhead costs (like building rent, staff wages, materials), then add them to your service price so you know what you need to charge to break even. For example, if overhead is $1000 a month and you do 50 haircuts for $20 each, you'll want to add $20 to your haircut price – this new total of $40 is your cost price. From there, use the tool to determine your markup percentage or sale price so you can make a profit.
Absolutely. Let’s say your service is hairdressing. Work out your overhead costs (like building rent, staff wages, materials), then add them to your service price so you know what you need to charge to break even. For example, if overhead is $1000 a month and you do 50 haircuts for $20 each, you'll want to add $20 to your haircut price – this new total of $40 is your cost price. From there, use the tool to determine your markup percentage or sale price so you can make a profit.
Why accurate markups work
Price setting takes careful thought and nail-biting precision – but the rewards are worth it.
Optimize your pricing strategy
The right price tags will help maximize your profitability and fend off your competitors.
Better understand your profit margins
A clear view of your markups makes it easier to predict how much money you can make.
Boost your confidence in financial planning
A firm grasp of your costs and profits lets you make data-driven decisions for your business.
Here’s a range of guides on financial planning and performance
Track your profitability with Xero
Xero’s accounting software gives you a clear picture of your finances. Whether you’re checking your dashboard for headline info on sales and cash flow, or diving deep into your business performance with advanced tools, you’ll have the right info whenever you need it.
- Keep track of your profitability in real time
- Customize reports to suit your business
- Access all your data from anywhere, whenever you need it
Discover more calculators for your business
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Disclaimer
Xero does not provide accounting, tax, business or legal advice. This calculator has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business.
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