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Cost-Plus Pricing Calculator

Enter the unit cost and markup percentage to get the selling price and profit per unit.

How it is calculated

Cost-plus pricing adds a percentage on top of your unit cost: price = cost × (1 + markup ÷ 100), and profit per unit = price − cost. The markup is a percentage of the cost, not of the selling price. Cost and markup cannot be negative, and money is shown in dollars. Cost should include everything you spend to make or buy one unit, such as materials, labour, shipping in and packaging; the tool does not add overhead for you. Taxes such as VAT or sales tax are not included in the price, so add them separately where they apply. The tool does not check whether customers will accept the price.

Worked example

A product costs $40 per unit and you want a 35% markup. Markup amount: 40 × 0.35 = $14. Selling price: 40 + 14 = $54.00. Profit per unit: $14.00. As a share of the selling price, that profit is 14 ÷ 54 ≈ 25.9%, lower than the 35% markup.

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Common mistakes

  • Confusing markup with margin. A 35% markup earns only about 25.9% margin on the price. To hit a 35% margin you would need a markup of about 53.8%.
  • Leaving overhead and shipping out of the cost, so the real profit is smaller than the tool shows.
  • Entering the markup as a decimal. 35% must be typed as 35, not 0.35, which would add just 0.35%.
  • Forgetting sales tax or VAT, which are charged on top of the price this tool gives.
  • Applying one markup to every item without looking at the market. A fixed markup guarantees the percentage, not that the product sells.

Sources

About this calculator

This calculator uses cost-plus pricing, one of the oldest and simplest pricing methods: take the unit cost of a product and multiply it by (1 + markup%) to get the selling price. A 40% markup on a $10 item, for example, yields a $14 price and a $4 per-unit profit.

Retailers, manufacturers, contractors and freelancers use cost-plus pricing because it guarantees a consistent profit margin on every unit regardless of market conditions, and it's easy to explain to customers or clients. It's less sophisticated than value-based or competitor-based pricing, but it remains the default starting point for pricing new products and services.

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Comments (1)

  • Editorial team

    This also works for quoting a job, not only a product. Add labour hours at your own cost rate, materials and travel into one cost figure, then enter that as the cost. The profit line shows what is left before overhead you did not include, such as rent, insurance or unpaid admin time. Which costs do you usually forget to count when pricing?

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