Pricing · markup guide
85% markup: margin and selling price
A 85% markup means the selling price is your cost plus 85% of that cost, so you multiply the cost by 1.85. It gives a profit margin of 45.95%, because the profit is measured against the higher selling price. An item that costs £100 sells for £185.00 and makes £85.00 profit.
VAT rate checked against GOV.UK on .
Profit margin
45.95%
from a 85% markup
Multiply cost by
1.85
to get the price ex VAT
Price on £100 cost
£185.00
before VAT
With 20% VAT
× 2.22
cost to shelf price
Selling prices with a 85% 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 | £1.85 | £0.85 | £2.22 |
| £5.00 | £9.25 | £4.25 | £11.10 |
| £10.00 | £18.50 | £8.50 | £22.20 |
| £25.00 | £46.25 | £21.25 | £55.50 |
| £50.00 | £92.50 | £42.50 | £111.00 |
| £100.00 | £185.00 | £85.00 | £222.00 |
| £250.00 | £462.50 | £212.50 | £555.00 |
| £1,000.00 | £1,850.00 | £850.00 | £2,220.00 |
Nearby markups
Markup, the margin it gives and the multiplier to use on your cost.
| Markup | Margin | Multiplier |
|---|---|---|
| 65% | 39.39% | × 1.65 |
| 70% | 41.18% | × 1.7 |
| 75% | 42.86% | × 1.75 |
| 80% | 44.44% | × 1.8 |
| 90% | 47.37% | × 1.9 |
| 95% | 48.72% | × 1.95 |
| 100% | 50% | × 2 |
Markup is not the same as margin
People often mix these up. A 85% markup is a 45.95% margin. If you actually want a 85% margin, you need a markup of 566.67%, so the price is cost × 6.6667.
How far you can discount
With a 85% markup you can take up to 45.95% off the selling price before you are selling at cost. A 10% discount leaves a margin of 39.94%, and 20% off leaves 32.43%.
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 × 2.22. The VAT goes to HMRC, so it does not change your 45.95% margin.
Profit in each pound of sales
Gross profit is between two fifths and half of each pound you take before VAT, and the goods cost you the other 54p. After a 10% discount you would need to sell only about 28% more units to make the same gross profit as at full price.
How far apart the markup and margin are
At this level the two figures are far apart: the margin is 39.05 percentage points below the markup. On a £100 cost, pricing for a true 85% margin would mean charging £666.67 instead of £185.00. Another 10 points of markup would add only 2.77 percentage points of margin, because each extra point counts for less as the price climbs.
Other markups
- 70% markup (41.18% margin)
- 75% markup (42.86% margin)
- 80% markup (44.44% margin)
- 90% markup (47.37% margin)
- 95% markup (48.72% margin)
- 100% markup (50% margin)
Common questions
What margin is a 85% markup?
45.95%. Divide the markup by 100 plus the markup: 85 ÷ 185 = 45.95%.
How do I add a 85% markup to a price?
Multiply the cost by 1.85. For example, £40 × 1.85 = £74.00. In Excel or Google Sheets, with the cost in A2, use =A2*1.85.
What is a 85% markup on £100?
£85 of profit, so the selling price is £185.00 before VAT, or £222.00 with 20% VAT added.
How do I work out the cost from a price with a 85% markup?
Divide the selling price by 1.85. A price of £60 means a cost of £32.43. 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.