Markup and Margin Calculator (Nigeria)

Questions people ask

What is the difference between markup and margin?

Markup measures profit against your cost; margin measures it against the price you charge. A 50% markup on a cost of ₦100 gives a price of ₦150, which is a 33% margin. Both describe the same sale, so quote whichever your trade uses, but never assume they are the same number.

What markup should I use?

There is no correct figure, only the one that covers your costs and the work you do not bill for. Trades quoting materials plus labour commonly work at 20% to 50% on materials, while retail often needs 100% or more to cover premises and stock that does not sell. Start from what you must earn a month, not from what a competitor charges.

Does VAT go on before or after the markup?

After. You mark up your cost to reach a selling price, and VAT at 7.5% is then charged on that selling price. Adding VAT before the markup marks up the tax itself, which overcharges your customer and is not what the invoice should show.

Is my cost the price before or after VAT?

If you are VAT-registered and can reclaim the VAT on what you bought, use the cost before VAT, because that tax is not really yours to bear. If you cannot reclaim it, the VAT is part of what the item cost you and belongs in the figure you mark up.

Can I work backwards from the price I want to charge?

Yes. Choose Selling price, enter your cost and the figure you intend to quote, and the calculator shows the profit and both percentages. That is the quickest way to check whether a price a customer has pushed you to still leaves anything.

Does a small company have to add VAT?

Only above the small-company threshold. The Nigeria Tax Act 2025 sets it at ₦50m turnover and the Administration Act uses ₦100m, and the two have not been reconciled, so confirm which applies to you before you charge it.

Is anything uploaded?

No. The calculation runs in your browser and your figures never reach a server. There is no account and nothing is stored.