Markup calculator: from cost to selling price
Enter the taxes, expenses and margin that come out of each sale. The calculator returns your operation's markup divisor and multiplier — the index that prices every product going through the same conditions, whatever its cost.
No sign-up, no email and no usage limit. The calculation runs in your browser, and the result link carries your numbers to whoever you want to show them to.
Calculate your operation's markup
Fill in the percentages that come out of each sale. The index appears instantly, with no sign-up, and the link below carries this same calculation to whoever you like.
Markup multiplier
1.7241
Multiply the purchase cost by this index to reach the selling price. It already carries the 42% that comes out of the price before the cost is paid.
- Markup divisor
- 0.58
- Sale result
- 10%
It is the slice of the price left to pay for the cost after 42% of taxes, variable expenses, working capital and contribution margin. The price is the cost divided by it.
Of the 28% the index reserves, 18% goes to overhead. This is the percentage you compare with the month-end close; the contribution above it is what decides discounts and mix.
Link to this calculation
The link opens the calculator with these same numbers. Nothing you type leaves your browser.
How markup is calculated
Two divisions, and the second is the inverse of the first. The hard part is not the math: it is finding out, honestly, what goes into each percentage — and what does not.
Taxes, variable expenses, working capital and contribution margin are slices of the selling price. Add the four and you know how much of the price is already spoken for before the product is paid for. What remains is the markup divisor:
markup divisor = (100 − taxes − variable expenses − working capital − contribution margin) ÷ 100
markup multiplier = 1 ÷ markup divisor
selling price = cost ÷ markup divisor
With 8% in taxes, 4% in variable expenses, 2% in working capital and 28% in contribution margin, the sum is 42%. That leaves 58% of the price to pay for the cost, so the markup divisor is 0.58 and the multiplier is 1.7241. A product that cost R$ 100.00 sells for R$ 172.41.
The two indexes say the same thing in reverse, which is why mixing them up is so easy. The divisor is always below 1 and the cost is divided by it; the multiplier is always above 1 and the cost is multiplied by it. Anyone who multiplies the cost by the divisor lands on a price below the cost itself, and the mistake is visible at once. Anyone who divides the cost by the multiplier lands almost in the same place, and that one goes unnoticed across an entire catalog.
Notice what was left out of the divisor: fixed expense. It does not form the price, because it is not born of the sale — it is allocated over what was sold, afterward. That is why the fourth line is called contribution margin and not profit: it is what the sale delivers to pay for overhead, and profit is whatever is left of that.
result index = contribution index − overhead index
In the example, the 28% reserved by the index still has to pay 18% of overhead: 10% remains. A markup index can be perfect and this last line still come out negative — it happens whenever the operation has shrunk and the overhead allocation has grown without anyone redoing the math. It is the difference between a price that covers the item and a price that covers the company.
Notice that the index never mentions the product. It describes the operation — the tax regime, how you get paid, the cost of the term granted and the intended contribution — and that is why the same index prices everything that goes through the same conditions. The cost only enters on the last line, when you want the price of a specific item.
Where to find each percentage
The index is only as good as its inputs. Four come from documents the company already has; the contribution margin is the only one that is a decision.
Taxes: from your tax regime, not the purchase invoice
What goes here is what applies to the sale. Under Simples Nacional, it is the effective rate for your revenue bracket — the one that comes out of the PGDAS return, not the nominal table rate. Under presumed or actual profit, it is the sum of ICMS, PIS and Cofins on the sale, net of any credit. Tax paid on the purchase does not go here: it is already inside the cost. IPI stays out too — it is added afterward and does not come out of the price.
Variable expenses: what only exists once there is a sale
Sales commission, the card-machine fee by card brand, marketplace commission, delivery freight to the customer and the returns provision. Anyone who sells by card and by Pix has two different percentages, and using the monthly average is acceptable for a first pass — it is also what makes the price of a ten-installment sale come out short.
Working capital: what the payment terms you grant really cost
Selling on 30-day terms does not cost the same as selling for cash. The money that stays with the customer is money your operation finances, and its cost is the average term granted multiplied by the cost of capital — the working-capital rate your bank charges, or what the same money would earn if invested. It is the line almost no spreadsheet has, and it is what makes an early-payment discount a far better deal than it looks.
Contribution margin: what the sale delivers, not profit
This is the only line you decide. It is the share of the price left once the cost and the lines above it have been paid, and it is how the operation supports the month's overhead. That is why 28% of contribution on a cost of R$ 100.00 gives R$ 48.27, and not 28% of R$ 100.00: the price that carries the contribution is larger than the cost.
Fixed expense: the allocation you measure, which comes after the price
Add up a month's fixed expenses — rent, payroll, utilities, accountant, systems — and divide by the same month's revenue. The result is the allocation percentage, and it does not enter the divisor: it consumes the contribution the divisor already reserved. Of the 28% in the example, 18% goes to overhead and 10% is left. Estimating "around twenty percent" here is the most expensive mistake in this calculator: it does not change the price, it changes how you read what the operation is earning.
Five mistakes the markup calculation hides
All of them produce a plausible number, and that is what makes them expensive: nobody doubts a price that came out of a formula.
Adding the percentages to the cost instead of dividing the cost
A cost of R$ 100.00 and 42% in rates do not make R$ 142.00. The 42% is a slice of the selling price, and the price does not exist yet when the sum is made — the calculation chases its own tail. Charging R$ 142.00, the rates take their cut and what remains is less than the item cost. The price that works is R$ 172.41, well above what the sum suggested.
Confusing the multiplier with the profit margin
A markup of 1.7241 does not mean that whole difference becomes profit. It is how many times the cost fits into the price, and inside it sit the tax, the commission, the card fee and the cost of the payment term. What remains after those four is the contribution margin (28% in this example), and profit only appears once overhead is paid: 10%. Reading the multiplier as margin is what makes a shop celebrate a high index while closing the month in the red.
Allocating fixed expense inside the price
Adding the overhead allocation to the divisor percentages does not change the price — 18% of fixed expense plus 10% of profit make the same 28% — but it changes what the number means. From then on the last line stops being the contribution margin and becomes the result after allocation, and that is the line someone will use to decide how far to discount. A discount that still pays for the overhead starts to look like a loss, and the item that should leave the mix stays in the catalog.
Using a single index for the whole catalog
The index belongs to the operation, and the lines in a catalog do not all share the same operation: what sells on an installment card carries more fees than what sells by Pix, what sells on sixty-day terms carries more working capital than what sells for cash, and tax rates change by NCM code. A single index is a good starting point and a terrible finishing point.
Keeping the index you calculated last year
The fixed-expense allocation is a division by revenue, and revenue changes every month. A drop in sales raises the weight of overhead on each sale, and the contribution that was enough last year stops paying for the month. It is the kind of lag that shows up in no single product and shows up in full in the quarter's result.
When a single index can no longer handle the catalog
This calculator solves the index for one operation. It keeps solving it as long as the catalog is short enough to fit in a single index and the cost changes slowly enough for the math to be redone by hand once in a while.
What it does not do is keep up with fifteen thousand items whose cost changes with every invoice that comes in, whose tax rate changes by NCM code and by destination state, and whose payment method changes the variable-expense percentage within the same week. That is the job of RevPrice, the pricing software that Revema Tech develops: the same calculation, applied item by item, with the cost coming from the ERP and the rule written in one place.
If you are still deciding whether you need one, the comparison between spreadsheet and software shows the point at which the math flips — without rushing, and without assuming it has flipped.