Free tool for India
Profit margin, markup and break-even calculator.
Enter what an item costs you and what you sell it for, with or without GST. You get the margin, the markup and the number of sales a month that covers your fixed costs.
- GST taken out of the MRP
- Margin, markup, break-even
- Nothing is sent or saved
Margin, markup and break-even calculator
How it’s worked out.
The rules the calculator applies, from the CGST Act, the Packaged Commodities Rules and ICAI’s study material.
Markup is profit as a share of cost. Margin is profit as a share of the selling price. So a 25% markup on cost is a 20% margin on sales.
Source: ICAI Foundation Paper 1, suggested answers, June 2024, checked 17 Oct 2026
A registered business can take credit of the GST charged on goods and services it uses in the business. That GST comes back, so the cost is taken before GST.
Source: CGST Act 2017, s.16(1) (CBIC), checked 17 Oct 2026
A business in the composition scheme cannot collect GST from its customers, and cannot take input tax credit. Its cost includes the GST it paid.
Source: CGST Act 2017, s.10(4) (CBIC), checked 17 Oct 2026
The MRP on a package is the most it may be sold for to the consumer, inclusive of all taxes. The price before GST is MRP × 100 ÷ (100 + GST rate).
Source: Legal Metrology (Packaged Commodities) Rules 2011, rule 2(m), checked 17 Oct 2026
Contribution per unit is the selling price less the variable cost per unit.
Source: ICAI study material, Marginal costing, checked 17 Oct 2026
Break-even point in units is fixed costs ÷ contribution per unit. In value, it is fixed costs ÷ P/V ratio, where the P/V ratio is contribution ÷ sales.
Source: ICAI study material, Marginal costing, checked 17 Oct 2026
Margin of safety is projected sales less break-even sales.
Source: ICAI study material, Marginal costing, checked 17 Oct 2026
One example, step by step.
An item that costs ₹300 before GST and sells at an MRP of ₹590 with 18% GST. The shop’s fixed costs are ₹2,00,000 a month, and it expects to sell 1,700 a month.
- Price before GST590 × 100 ÷ 118
- ₹500
- GST in the MRP
- ₹90
- Profit per unit500 − 300
- ₹200
- Margin200 ÷ 500
- 40%
- Markup200 ÷ 300
- 66.67%
- Break-even2,00,000 ÷ 200
- 1,000 units
- Break-even sales2,00,000 ÷ 40%
- ₹5,00,000
- Margin of safety1,700 − 1,000
- 700 units
At 1,700 units a month, sales can fall by 700 units, about 41%, before the shop stops covering its fixed costs.
An illustration, not tax advice. The break-even figures are ICAI’s own Example 3 in its study material on marginal costing.
What it does not cover.
Check these before you set a price on the figures.
GST you can’t claim back
Some purchases carry GST that never comes back. Add it to the cost.
Input tax credit is not available on some purchases, such as cars for up to 13 people (with exceptions), and food and beverages.
Source: CGST Act 2017, s.17(5) (CBIC), checked 17 Oct 2026
Composition tax on turnover
A composition business pays tax on its turnover out of its own pocket. Take it off the margin yourself.
Cess and other taxes in the MRP
The calculator takes only GST out of the MRP. Where compensation cess or another tax is in the price too, take it out first.
Discounts and schemes
A trade discount or a scheme lowers the price you get. Enter the price after it.
More than one product
Break-even here is for one product. With several, each one’s contribution counts in proportion to its share of sales.
Income tax and finance costs
The margin is before income tax, and interest counts only if you enter it in fixed costs.
More accounting and business tools.
Depreciation, margins and break-even, and what an ERP would cost and save you. And the tools that go with this one.
Margin questions people ask.
What is the difference between margin and markup?
Both start from the same profit. Margin divides it by the selling price, markup divides it by the cost. An item bought at ₹300 and sold at ₹500 has a margin of 40% and a markup of 66.67%.
How do I work out a selling price for a target margin?
Divide the cost by (1 − margin). For a 40% margin on a ₹300 cost: 300 ÷ 0.6 = ₹500. Adding 40% to cost gives ₹420, which is a margin of only 28.57%.
How do I take GST out of an MRP?
Multiply the MRP by 100 and divide by (100 + the GST rate). An MRP of ₹590 with 18% GST is ₹500 before GST, and ₹90 of GST.
Should margin be worked out with or without GST?
For a regular GST business, without. The GST you collect goes to the government, and the GST you paid on the purchase comes back as input tax credit. Work margin out on both figures before GST.
I am in the composition scheme. What changes?
You can’t take input tax credit, so the GST you paid is part of your cost. You also can’t collect GST from customers, so the price you charge is the whole price. Choose “Composition or none” and enter both as they are.
What is the break-even point?
The sales at which you make neither a profit nor a loss: each sale’s contribution, its price less its variable cost, has covered the fixed costs. It is fixed costs ÷ contribution per unit.
What is the margin of safety?
How far sales can fall before you reach break-even: expected sales less break-even sales. The larger it is, the more room you have.
Is what I type saved or sent anywhere?
No. The figures are worked out in your browser. Nothing is sent, stored or tracked by the calculator.
— the PrimoERP team
Come for a free ERP demo. We'll show you your business on one screen.
your business, on one screen, in one sitting.
Bring your questions and a rough idea of how you work today. We set up a demo for a business like yours and walk through it with you.
- Set up for your industry
- Online, at a time you pick
- No card, no contract