Pricing · markup guide
45% markup: margin and selling price
A 45% markup means the selling price is your cost plus 45% of that cost, so you multiply the cost by 1.45. It gives a profit margin of 31.03%, because the profit is measured against the higher selling price. An item that costs £100 sells for £145.00 and makes £45.00 profit.
VAT rate checked against GOV.UK on .
Profit margin
31.03%
from a 45% markup
Multiply cost by
1.45
to get the price ex VAT
Price on £100 cost
£145.00
before VAT
With 20% VAT
× 1.74
cost to shelf price
Selling prices with a 45% 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 | £1.45 | £0.45 | £1.74 |
| £5.00 | £7.25 | £2.25 | £8.70 |
| £10.00 | £14.50 | £4.50 | £17.40 |
| £25.00 | £36.25 | £11.25 | £43.50 |
| £50.00 | £72.50 | £22.50 | £87.00 |
| £100.00 | £145.00 | £45.00 | £174.00 |
| £250.00 | £362.50 | £112.50 | £435.00 |
| £1,000.00 | £1,450.00 | £450.00 | £1,740.00 |
Nearby markups
Markup, the margin it gives and the multiplier to use on your cost.
| Markup | Margin | Multiplier |
|---|---|---|
| 25% | 20% | × 1.25 |
| 30% | 23.08% | × 1.3 |
| 35% | 25.93% | × 1.35 |
| 40% | 28.57% | × 1.4 |
| 50% | 33.33% | × 1.5 |
| 55% | 35.48% | × 1.55 |
| 60% | 37.5% | × 1.6 |
| 65% | 39.39% | × 1.65 |
Markup is not the same as margin
People often mix these up. A 45% markup is a 31.03% margin. If you actually want a 45% margin, you need a markup of 81.82%, so the price is cost × 1.8182.
How far you can discount
With a 45% markup you can take up to 31.03% off the selling price before you are selling at cost. A 10% discount leaves a margin of 23.37%, and 20% off leaves 13.79%.
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 × 1.74. The VAT goes to HMRC, so it does not change your 31.03% margin.
Profit in each pound of sales
Gross profit is just under a third of each pound you take before VAT, and the goods cost you the other 69p. After a 10% discount you would need to sell about 48% more units to make the same gross profit as at full price.
How far apart the markup and margin are
The two figures drift further apart as the markup rises: the margin is 13.97 percentage points below the markup. On a £100 cost, pricing for a true 45% margin would mean charging £181.82 instead of £145.00. Another 10 points of markup would add 4.45 percentage points of margin.
Other markups
- 30% markup (23.08% margin)
- 35% markup (25.93% margin)
- 40% markup (28.57% margin)
- 50% markup (33.33% margin)
- 55% markup (35.48% margin)
- 60% markup (37.5% margin)
Common questions
What margin is a 45% markup?
31.03%. Divide the markup by 100 plus the markup: 45 ÷ 145 = 31.03%.
How do I add a 45% markup to a price?
Multiply the cost by 1.45. For example, £40 × 1.45 = £58.00. In Excel or Google Sheets, with the cost in A2, use =A2*1.45.
What is a 45% markup on £100?
£45 of profit, so the selling price is £145.00 before VAT, or £174.00 with 20% VAT added.
How do I work out the cost from a price with a 45% markup?
Divide the selling price by 1.45. A price of £60 means a cost of £41.38. 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.