How this calculator works
Enter a cost that includes any purchase tax you cannot recover. Sales tax collected from the customer is excluded from business revenue and profit. Choose whether an entered selling price is before or after tax. Select a known pricing pair to recover the other measures. You can enter a tax rate or infer it from reference prices before and after tax. The same rate is used wherever tax is calculated, with no exemptions or compound tax layers.
Formula
Pre-tax revenue = tax-inclusive price / (1 + tax fraction). Profit = pre-tax revenue - net cost basis. Margin = profit / pre-tax revenue. Markup = profit / cost. Tax collected = pre-tax revenue x tax fraction.
Worked example
$100 of net cost with a 20% margin gives $125 before tax, $25 profit and 25% markup. At 13% tax the customer pays $141.25 and tax on the sale is $16.25. A $113 tax-inclusive selling price at 13% represents $100 of revenue.
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Frequently asked questions
Is sales tax part of profit?
Tax collected for remittance is separated from revenue. A recoverable purchase tax is separated from cost. Tax you cannot recover belongs in the cost basis.
Does the default 13% cover all of Canada?
No. Enter the applicable rate for the product and place of supply. Rates, exemptions and recoverability differ by province and transaction.
Can I work back from a tax-inclusive price?
Yes. Select a pair containing selling price and choose tax included. The calculator extracts tax before calculating margin and markup.