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Free tool · alFatora

Price and margin calculator

Price a product from its cost and the margin you want, or find out what your current shelf price earns, with 15% VAT.

What do you want to work out?
Profit worked out as
Selling price including VAT115.00
Selling price before VAT100.00
VAT (15%)15.00
Profit per unit25.00
Margin on price25.00%
Markup on cost33.33%

Profit is worked out on the price before VAT: output VAT is paid over to ZATCA and is not your revenue.

How it is worked out

Mixing up margin and markup is the most common pricing mistake.

  1. Cost before VAT

    A VAT-registered business deducts the VAT on its purchases, so the cost you price on is the cost before VAT.

  2. Margin is not markup

    A 25% margin means profit is a quarter of the price: a cost of 75 sells at 100. A 25% markup on cost makes the price 93.75, a margin of only 20%.

  3. VAT comes last

    Work out your price before VAT, then add 15%. From a VAT-inclusive shelf price, divide by 1.15 before taking away the cost.

Questions

What is the difference between margin and markup?

Margin is profit as a share of the selling price; markup is profit as a share of the cost. Cost 75, price 100: profit 25, a 25% margin and a 33.33% markup.

Why is the cost entered before VAT?

A registered business deducts the VAT on its purchases from its output VAT with a valid tax invoice, so that VAT does not stay with it as a cost. The calculator assumes a VAT-registered business.

My shelf price includes VAT. How do I find my profit?

Choose “My profit from a price” and enter the cost and the shelf price. The calculator takes the VAT out of the price first, then works out profit and margin from the rest.

Your prices and their VAT on every invoice

In alFatora, VAT on every line and the totals are worked out when the invoice is issued, from the selling price you set.

Zakat, Tax and Customs AuthorityFatooraCompatible with ZATCA Phase 2
e-invoicing requirements
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