Pricing · markup guide
10% markup: margin and selling price
A 10% markup means the selling price is your cost plus 10% of that cost, so you multiply the cost by 1.1. It gives a profit margin of 9.09%, because the profit is measured against the higher selling price. An item that costs £100 sells for £110.00 and makes £10.00 profit.
VAT rate checked against GOV.UK on .
Profit margin
9.09%
from a 10% markup
Multiply cost by
1.1
to get the price ex VAT
Price on £100 cost
£110.00
before VAT
With 20% VAT
× 1.32
cost to shelf price
Selling prices with a 10% markup
Price with VAT assumes you are VAT registered and the item is standard-rated at 20%.
| Cost | Selling price | Profit | Price with VAT |
|---|---|---|---|
| £1.00 | £1.10 | £0.10 | £1.32 |
| £5.00 | £5.50 | £0.50 | £6.60 |
| £10.00 | £11.00 | £1.00 | £13.20 |
| £25.00 | £27.50 | £2.50 | £33.00 |
| £50.00 | £55.00 | £5.00 | £66.00 |
| £100.00 | £110.00 | £10.00 | £132.00 |
| £250.00 | £275.00 | £25.00 | £330.00 |
| £1,000.00 | £1,100.00 | £100.00 | £1,320.00 |
Nearby markups
Markup, the margin it gives and the multiplier to use on your cost.
| Markup | Margin | Multiplier |
|---|---|---|
| 5% | 4.76% | × 1.05 |
| 15% | 13.04% | × 1.15 |
| 20% | 16.67% | × 1.2 |
| 25% | 20% | × 1.25 |
| 30% | 23.08% | × 1.3 |
Markup is not the same as margin
People often mix these up. A 10% markup is a 9.09% margin. If you actually want a 10% margin, you need a markup of 11.11%, so the price is cost × 1.1111.
How far you can discount
With a 10% markup you can take up to 9.09% off the selling price before you are selling at cost. So even a 10% discount would mean selling at or below cost.
Adding VAT
If you are VAT registered and sell at the 20% standard rate, add VAT after the markup. That makes the shelf price cost × 1.32. The VAT goes to HMRC, so it does not change your 9.09% margin.
Thin margins
A 9.09% margin leaves little room for overheads such as rent, staff and card fees, which all come out of gross profit. Low markups usually only work on high-volume lines.
Profit in each pound of sales
A 9.09% margin is in single figures: less than 10p of each pound you take before VAT is gross profit, and the rest pays for the goods. A 10% discount leaves no profit on any unit, so selling more cannot make up for it.
How far apart the markup and margin are
At a markup this low the two figures are close together: the margin is 0.91 percentage points below the markup. On a £100 cost, pricing for a true 10% margin would mean charging £111.11 instead of £110.00. Another 10 points of markup would still add 7.58 percentage points of margin.
Other markups
- 5% markup (4.76% margin)
- 15% markup (13.04% margin)
- 20% markup (16.67% margin)
- 25% markup (20% margin)
- 30% markup (23.08% margin)
- 35% markup (25.93% margin)
Common questions
What margin is a 10% markup?
9.09%. Divide the markup by 100 plus the markup: 10 ÷ 110 = 9.09%.
How do I add a 10% markup to a price?
Multiply the cost by 1.1. For example, £40 × 1.1 = £44.00. In Excel or Google Sheets, with the cost in A2, use =A2*1.1.
What is a 10% markup on £100?
£10 of profit, so the selling price is £110.00 before VAT, or £132.00 with 20% VAT added.
How do I work out the cost from a price with a 10% markup?
Divide the selling price by 1.1. A price of £60 means a cost of £54.55. If the price includes 20% VAT, divide by 1.2 first.
Sources and assumptions
- Markup = profit ÷ cost. Margin = profit ÷ selling price. Both use prices before VAT.
- Cost means what you pay for the item, excluding any VAT you can reclaim.
Figures are rounded to the nearest penny or to two decimal places.