# Profit margin and markup calculator

> Margin is profit as a share of the selling price; markup is profit as a share of cost. A product costing AED 700 and selling for AED 1,000 (before VAT) has a 30% margin and a 42.9% markup. To hit a target margin, price = cost ÷ (1 − margin). Add 5% VAT on top for the customer price.

Interactive calculator: https://www.countify.ae/tools/profit-margin-calculator · Updated 2026-10-14 · Countify UAE

## Margin vs markup on a AED 700 cost

Prices before VAT.

| Price | Margin (profit ÷ price) | Markup (profit ÷ cost) |
| --- | --- | --- |
| AED 875 | 20% | 25% |
| AED 1,000 | 30% | 42.86% |
| AED 1,050 | 33.33% | 50% |
| AED 1,400 | 50% | 100% |

A 50% markup is only a 33% margin; confusing the two is a common pricing error.

## Margin, markup and VAT

Work out margins on prices before VAT; the 5% VAT you collect belongs to the FTA. If you quote VAT-inclusive prices to consumers, divide by 1.05 first, or use the [VAT calculator](https://www.countify.ae/tools/vat-calculator).

## Frequently asked questions

### What is the difference between margin and markup?

Margin divides profit by price; markup divides profit by cost. A 50% markup equals a 33.3% margin.