Margin calculator

How the margin calculator works

Margin is your selling price minus your cost, divided by the selling price, all excluding VAT. Buy an item at EUR 60, sell it at EUR 100 excluding VAT, and you make EUR 40: a margin of 40 percent. Of every euro your customer pays, VAT aside, you keep 40 cents. The VAT itself, at each Belgian rate, you work out in the Belgian VAT calculator.

This is your gross margin: the profit after the cost of goods, before shipping, payment fees, advertising and fixed costs. Take the costs of each order off as well and you get your net margin per sale. The calculator shows both once you choose online shop under costs per order.

Margin or markup: the same profit, two percentages

Markup divides the same profit by what you paid. EUR 40 of profit on a EUR 60 cost is a markup of 66.7 percent. Mixing the two up costs real money: add 40 percent markup when you meant a 40 percent margin and you sell at EUR 84 instead of EUR 100, keeping a margin of only 28.6 percent. The conversion runs both ways: margin is markup divided by 1 plus markup, markup is margin divided by 1 minus margin. In German the words are Marge and Aufschlag, in Dutch marge and opslag; the trap is the same in every language.

Price from a target margin, with VAT by country

Know the margin you need? Divide your cost by 1 minus that margin. For 40 percent on a cost of EUR 60: 60 divided by 0.6 is EUR 100 excluding VAT. Then VAT goes on top, at the rate of the country where it is due. The table gives the price for a EUR 60 cost at five target margins and four standard rates in the EU.

Selling to consumers in other EU countries, above EUR 10,000 a year in such distance sales you charge the rate of the customer's country, usually through the One Stop Shop. One price including VAT across Europe therefore means a different margin per country: at EUR 121 including VAT, a German order leaves you EUR 101.68 excluding VAT, a Swedish one EUR 96.80. Reduced rates exist too, such as 6 or 12 percent in Belgium and 7 percent in Germany; which product falls under which rate is set by each country's law. Selling in several countries usually also means a shop in several languages; see multilingual website development.

Working the other way round, because the market sets the price? Choose max. cost in the calculator. A product that sells at EUR 49.95 including 21 percent VAT brings in EUR 41.28 excluding VAT. At a 45 percent margin you can pay at most EUR 22.70 for it. That is the number to take to your supplier.

Small businesses that charge no VAT

In Belgium, a business with turnover up to EUR 25,000 excluding VAT can use the exemption scheme: it charges no VAT and cannot deduct any. Its cost price is then the purchase price including VAT. Other member states set their own thresholds, and since 2025 an EU business can use the exemption in other member states too. In the calculator, choose 0 percent and enter your cost including VAT.

Online shop costs per order, at today's rates

An online shop keeps less than its gross margin. Take the EUR 121 sale including VAT from the example. You pay EUR 6.50 for shipping and the customer pays by card through Mollie: 1.80 percent of 121 plus EUR 0.25 is EUR 2.43. Together EUR 8.93 comes off. Of EUR 40 gross profit, EUR 31.07 is left, a net margin of 31.1 percent. If the same customer pays with Bancontact, the Belgian debit card, the payment costs EUR 0.39 and you keep EUR 33.11.

The rates are those Mollie, Stripe and Shopify list for Belgium on 22 October 2026; a business registered elsewhere sees its own country's page. On Shopify, a payment provider other than Shopify Payments adds 2 percent per order on Basic and 1 percent on Grow, on top of what that provider charges. What a shop costs every month is in Shopify cost; choosing a platform first, see Wix or Shopify.

Discounts and your margin

A discount comes entirely off your profit, not off your revenue. After a discount k on a margin m you keep (m - k) divided by (1 - k), and to make the same profit you have to sell m divided by (m - k) times as much. Enter a discount in the calculator and you see both.

Twenty percent off a 25 percent margin means selling five times as much for the same profit. A promotion only pays when it brings customers who come back. Free shipping or a gift with purchase often costs less margin than the same value as a discount.

Margins by sector across Europe

A good margin depends on what you sell. The table gives gross and net margins of listed European companies per sector, from a January 2026 dataset of 6,560 companies. Gross margin is what remains after the cost of goods, net margin what remains after every cost. A small business usually buys at higher prices, so treat this as a benchmark, not a norm.

Apparel keeps 65 percent after the cost of goods, yet 9.4 percent after staff, stores, marketing and tax. That is the distance between the margin on a product and what a business really earns.

Four businesses, four sums

A maker under a small business exemption. You make candles in Belgium. Materials cost EUR 10 plus 21 percent VAT you cannot reclaim, so EUR 12.10. You sell at EUR 30 with no VAT on top. Your profit is EUR 17.90, your margin 59.7 percent. Cross the threshold and keep the price at EUR 30 including VAT, and you get EUR 24.79 excluding VAT while reclaiming VAT on materials: EUR 14.79 profit, EUR 3.11 less per candle. Raise the price when you become VAT-registered, not after.

An online shop that ships. The example above: EUR 121 including VAT, a 31.1 percent net margin after shipping and a card payment. Your break-even ROAS is 1 divided by 0.311, so 3.22. Use that net margin in the ROAS calculator before you start a campaign, or a ROAS of 3 looks profitable while it loses money. If the shop does not sell, start with why an online store is not selling.

A service business. You charge EUR 75 an hour excluding VAT and an hour of your employee costs EUR 45. Your margin is 40 percent, your markup 66.7 percent. Price a quote at 40 percent on top of the wage cost and you land at EUR 63 an hour with a 28.6 percent margin. A quote template with the margin in its own column prevents that.

A ten-person retailer. The market sets the price at EUR 49.95 including VAT. At a 45 percent margin you can pay at most EUR 22.70. Record that limit per product, and every new supplier price shows at once which products drop below your target.

What the calculator leaves out

• Fixed costs such as rent, salaries and software: you pay them from gross profit, per month rather than per item.
• Returns, breakage and stock you can no longer sell. Since 19 June 2026 EU consumers can cancel an online purchase with a withdrawal button, so count your own return rate in.
• Customs and duties on goods from outside the EU, which change what competitors pay; see the EUR 3 customs duty on small parcels.
• Tax on your profit. The calculator stops at profit per item.