Type what the supplier charged you, set the markup you want (or the margin you want to keep) and get the sell price with GST on top. A 25% markup is a 20% margin. This shows you which one you are actually charging.
Markup is added to what you paid.
$633.60 inc GST
Sell at $576.00 ex GST + $57.60 GST. You keep $96.00 on the materials.
That is a 20.0% markup on cost and a 16.7% margin on price. They are never the same number: markup sits on what you paid, margin sits on what the customer pays.
| Markup | Margin it gives you |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 33.3% | 25.0% |
| 50% | 33.3% |
| 100% | 50.0% |
Guide only. Whether you show materials as a separate line or fold them into the job price is your call and your accountant’s. GST applies to the sell price if you are registered.
A tradie adds 20% to a $1,000 supplier bill and sells the materials for $1,200. He thinks he made 20% on them. He made $200 on $1,200, which is 16.7%. The 20% was a markup on the cost; the margin on the price is smaller, every time, and the bigger the markup the wider the gap.
It matters because the rest of the business talks in margin. The accountant does. The bank does. The job cost calculator does. If you want to keep 25% of the materials price, you need to mark the cost up by a third, not a quarter.
Set either number and the calculator gives you the other, the sell price, the dollars you keep, and the GST line for the invoice.
Markup is the amount you add to what you paid, expressed as a share of the cost. Margin is the share of the selling price that is profit. Sell $100 of materials for $125 and the markup is 25% but the margin is 20%. The table on this page lists the pairs; the two numbers only meet at zero.
There is no legal rule and no single right number. The markup pays for the supplier run, the trade account, handling returns and carrying the warranty, so it should at least cover that time at your charge-out rate. Many tradies fold materials into the job price instead of showing a marked-up line. This calculator does not tell you what to charge; it shows what any number you pick actually means as a margin.
If you are registered for GST, yes: GST applies to the full sell price you charge the customer, not just the markup. You claim the GST on the supplier invoice as an input credit. Tick the box and the calculator shows the GST line separately, which is how it belongs on a tax invoice.
Most quotes show a materials line at the sell price, not the supplier cost and the markup. What you show is your call and your accountant's. The calculator gives you the sell price to put on the line.
BackOnTools runs the trade business from the ute: the phone answered and jobs booked, quotes from your price book, materials and labour costed against every job, invoices with a pay link, crew and the safety paperwork with the job.
