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Finance Calc Kit
Tax

Margin Sales Tax Calculator

Calculate net price, sales tax amount, gross price, profit margin, and markup when selling products with sales tax.

Pricing inputs

$
%
%

Gross selling price (incl. tax)

$144.00

$133.33 net + $10.67 tax

Net price (excl. tax)

$133.33

Sales tax amount

$10.67

Gross profit

$33.33

Profit margin

25.0%

Markup

33.3%

Customer price breakdown

  • Cost$100.0069.4%
  • Profit$33.3323.1%
  • Sales tax$10.677.4%
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Pricing with profit margin, markup, and sales tax

Retailers must set a net selling price that covers cost, hits a profit target, and still accounts for sales tax collected on behalf of tax authorities. This calculator starts from your cost of goods, applies either a target profit margin or markup, then adds the applicable sales tax rate to show the final gross price the customer pays.

Sales tax is typically calculated on the pre-tax net price, not on your cost base. For margin and markup fundamentals without tax, use the margin calculator. For VAT-inclusive pricing, see the margin and VAT calculator. Missouri retailers can estimate combined state and local rates with the Missouri sales tax calculator. For general before-tax, after-tax, and tax-rate calculations, use the sales tax calculator.

Key formulas

Net Price=Cost1−Margin %/100\text{Net Price} = \frac{\text{Cost}}{1 - \text{Margin \%}/100}
Gross Price=Net Price×(1+Tax Rate100)\text{Gross Price} = \text{Net Price} \times \left(1 + \frac{\text{Tax Rate}}{100}\right)

When you enter markup instead of margin, net price equals cost multiplied by (1 + markup/100). Profit margin is always profit divided by net price, while markup is profit divided by cost.

Worked example

A product costs $100. You want a 25% profit margin and face an 8% sales tax. Net price = $100 ÷ 0.75 = $133.33. Profit is $33.33 (25% of net price). Sales tax = $133.33 × 8% = $10.67. The customer pays $144.00 gross.

Frequently asked questions

Is sales tax part of my revenue?
No. Sales tax is collected for the government and should be excluded when calculating profit margin. Use net price (pre-tax) as your revenue base.
Should I set prices using margin or markup?
Margin expresses profit as a share of selling price, which aligns with financial statements. Markup expresses profit as a share of cost, which many retailers find intuitive. Both reach the same net price when converted correctly.
Do all states tax the same base?
No. Some jurisdictions tax only goods, others include services. Local rates, exemptions, and destination rules vary. Confirm your applicable rate with official state or local tax guidance.
What if my target margin is 100%?
A 100% margin implies zero cost, which is not realistic for physical goods. Margins must stay below 100% because profit cannot equal or exceed the entire selling price unless cost is zero.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.