Business Markup Calculator UK: Simple Tool for Pricing and Profit

Pricing products correctly is crucial for profitability. Use our free Business Markup Calculator for UK businesses and learn how to apply markup strategies the right way.

May 10, 2025

Gross Margin

markup calculator

Setting prices for your products or services isn’t just about covering costs — it’s about securing enough profit to grow sustainably.

This is where markup comes in.

In this article, we’ll explain markup simply, show how to apply it correctly, and provide a free Business Markup Calculator built specifically for UK businesses.

What is Markup?

Markup is the percentage you add to your product or service cost to determine the selling price.

It ensures:

Your direct costs are covered
A profit margin is built into every sale

Simple Markup Formula:

Markup (%) = ((Selling Price - Cost Price) ÷ Cost Price) × 100

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Why Markup Matters for UK Businesses

VAT: UK businesses registered for VAT must carefully separate tax from true markup/profit calculations.
Competitive Markets: Setting the right markup can make you competitive without sacrificing profitability.
Cost Fluctuations: UK supply chains are increasingly volatile — proper markup cushions profit margins against rising costs.

✅ Markup is not a “one and done” figure — you should review it regularly.

Example: Markup in Action

Suppose you run a boutique in London.

Wholesale cost of a handbag = £40
You want a 60% markup.

Calculation:

Selling Price = Cost + (Cost × Markup %)

Selling Price = £40 + (£40 × 60%) = £64

✅ You sell the handbag for £64, building in your expected profit.

Free Business Markup Calculator UK

Use this simple tool to calculate your ideal selling price based on your desired markup:

Business Markup Calculator (UK)

Enter your cost price and desired markup percentage.

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How Often Should You Review Your Markup?

Best practice:

At least annually for most businesses
Quarterly if you operate in fast-moving markets (e.g., fashion, food, electronics)

✅ Regular reviews ensure your margins stay strong even when costs fluctuate.

Final Thoughts

Markup gives you pricing power — but only if you apply it correctly.

Price too low? You risk losses.
Price too high? You risk losing customers.

Using a structured markup strategy (and tools like this calculator) ensures:

Fair pricing
Protected profitability
Sustainable growth

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Master your pricing and profitability with these related guides:

Markup vs Margin: What’s the Difference and Why It Matters — Clarify the essential difference before setting your prices.
Markup and Margin Formula Explained Simply (With Free Calculator) — Understand how to manually calculate markup and margin with clear examples.
Mastering Pricing Strategy: How to Set Prices That Drive Profit Margins — Apply your markup calculations to create powerful, profit-focused pricing strategies.

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