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Sale price with VAT: $70 · 35% = $126.45 final (pre-VAT $112.90)

Calculate a sale price from cost $70, 35% margin, 12% VAT, and 3% fees → final $126.45. Keep tax separate from profit.

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Profit Margin: $70 → $100 = 30% (markup 42.86%)

Cost $70 and sale $100 yield $30 profit, 30% margin, and 42.86% markup. At a 35% target the recommended price is $107.69.

Sale price with VAT: $70 · 35% = $126.45 final

Use this calculator to price products without confusing tax with profit. Enter cost, target margin, VAT, and the variable fee from cards, marketplaces, or payment processors: it separates the price before tax, the VAT, and the fee, so you know exactly how much profit each sale keeps.

Quick answer (calculator defaults)

With a 70 cost, 35% target margin, 3% variable fee, and 12% VAT:

  • Price before VAT: ≈ 112.90
  • VAT included: ≈ 13.55 → final price ≈ 126.45
  • Variable fee: ≈ 3.39; net profit ≈ 39.52 (35% effective)
  • Margin ≠ VAT: the tax is passed through; profit comes from the net price.

Formulas

Price before VAT

Price before VAT = Cost / (1 − Target margin − Variable fee)

Final price

Final price = Price before VAT × (1 + VAT)

Step-by-step example (calculator defaults)

  1. Unit cost = 70.
  2. Target margin = 35% and variable fee = 3% → cost must represent 100 − 35 − 3 = 62% of the price.
  3. Price before VAT = 70 / 0.62 = 112.90.
  4. Fee = 112.90 × 3% = 3.39; profit = 112.90 − 70 − 3.39 = 39.52 (35% of the net price).
  5. VAT at 12% = 112.90 × 12% = 13.55; final price = 126.45.

Scenario table (same engine logic)

CostMarginFeeVATBefore VATFinalProfit
7035%3%12%112.90126.4539.52
7035%0%12%107.69120.6237.69
10040%5%12%181.82203.6472.73
5025%0%13%66.6775.3316.67
15030%10%12%250.00280.0075.00

Fee impact (same cost 70 and 35% margin, 12% VAT)

FeeBefore VATFinalProfitExtra vs 0% fee
0%107.69120.6237.69—
3%112.90126.4539.52+5.21 before VAT
5%116.67130.6740.83+8.98 before VAT
10%127.27142.5544.55+19.58 before VAT
15%140.00156.8049.00+32.31 before VAT

Margin vs markup (do not mix the targets)

Target marginDivisor (no fee)Pre-VAT price if cost 70Equivalent markup
25%0.7593.3333.33%
30%0.70100.0042.86%
35%0.65107.6953.84%
40%0.60116.6766.67%
50%0.50140.00100.00%

Markup = (price − cost) / cost. A 35% markup is not a 35% margin.

Interpreting the result

  • VAT is not margin: to measure profitability, analyze profit on the price before tax. Tax collected from the customer is not business profit.
  • Card or marketplace fees eat your margin: with a 3% fee, the same product goes from 107.69 to 112.90 before VAT to keep 35%. If you sell heavily through platforms, this adjustment is mandatory.
  • Common mistakes: adding VAT on top of an already margin-inflated price (double margin), forgetting variable fees, and using the wrong rate for sales to other countries.
  • If margin plus fees is too high, the recommended price explodes because little percentage remains to cover cost; review cost, fee, or margin before publishing.
Limits

This calculator works with gross margin per unit: it does not include fixed costs (rent, salaries, utilities) or withholdings. The 12% figure is the general VAT rate in Guatemala (educational reference; El Salvador applies 13% and Honduras 15%, each with its own regimes). Verify the current rate with the SAT or your country's tax authority.

Frequently asked questions

First divide cost by 1 minus the target margin and variable fees: 70 / (1 − 0.35 − 0.03) = 112.90 before VAT. Then multiply by (1 + VAT) for the final customer price: 126.45 at 12% VAT.

Use the price before VAT when analyzing profit. Tax collected from the customer is not business margin, so including it inflates the apparent profit.

Yes. Any fee tied to the sale reduces margin and should be included as a variable fee. With a 3% fee and a 35% margin target, the price before VAT rises from 107.69 to 112.90.

The recommended price becomes very high because too little percentage remains to cover cost. Example: a 40% margin plus 25% in fees leaves only 35% of the price for cost. Review cost, fees, or target margin.

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