Home › Tools
Markup vs margin: how to price products after fees and GST
A 50% markup is only a 33% margin. Mixing the two up is one of the most common pricing mistakes small sellers make, and fees and GST make the gap bigger.
The formulas
- Markup = profit ÷ cost. A $10 item sold for $15 has a 50% markup.
- Margin = profit ÷ selling price. The same item has a $5 ÷ $15 = 33% margin.
- To hit a target margin: price = cost ÷ (1 − margin). For a 40% margin on a $10 cost: $10 ÷ 0.6 = $16.67.
Fees come out of the price, not the cost
Marketplace and card fees are usually a percentage of the selling price (sometimes plus a fixed amount per sale). So you need to price for them, not just add them to cost. A rough formula when fees are a percentage of the sale:
price = (cost + fixed fee) ÷ (1 − target margin − fee %)
| Worked example (illustration only) | |
|---|---|
| Unit cost | $10.00 |
| Fixed fee per sale | $0.30 |
| Fee % of sale | 10% |
| Target margin | 40% |
| Price before GST | $10.30 ÷ 0.50 = $20.60 |
Then GST
If you're registered for GST, your shelf price for most goods includes 10% GST, so multiply the pre-GST price by 1.1 ($20.60 becomes $22.66). The GST isn't your money: it goes to the ATO on your BAS. See the ATO's How GST works page.
Discounts cost more than they look
If your margin is 30% and you take 10% off, you've lost a third of your profit on every sale. You'd need to sell noticeably more units just to make the same profit. Run the numbers before a sale, not after.
- GST calculator: add or remove 10% GST — runs in your browser, nothing is sent anywhere.
Want it done for you? Price, Markup & Margin Calculator (AU, GST-ready)
An offline calculator that finds the shelf price for your target margin after marketplace fees, card fees and GST, explains margin vs markup, checks discounts and exports a bulk price list to CSV.
- Works in any browser; no login or internet needed
- GST-inclusive shelf prices with .95 or whole-dollar rounding
- Discount break-even check
- Bulk price list export to CSV
US$9.99 one-time on Whop. Instant download.
See it on Whop →Related guides
- How much should I charge as a sole trader in Australia?
- Tradie quote calculator: work out your real hourly rate and price a job
- 5 offline money tools for Australian sole traders
General information only, not financial or tax advice. The worked example is an illustration, not a real fee schedule. Last checked 16 Nov 2026.