Frequently Asked Questions
What is the difference between markup and margin?
Markup is calculated as a percentage of the cost price. Margin (gross margin) is calculated as a percentage of the selling price. For example, if your cost is $100 and you sell for $150: your markup is 50% (profit ÷ cost), but your margin is 33.3% (profit ÷ selling price). Many business owners confuse these — our calculator shows both clearly.
How do I calculate my break-even point?
Break-even point in units = Fixed Costs ÷ (Selling Price per unit − Variable Cost per unit). The denominator is your "contribution margin" — the amount each sale contributes toward covering fixed costs. Once total sales cover all fixed costs, every additional sale generates profit. Our Break-Even Calculator shows this in both units and revenue.
What is a good gross profit margin for an Australian small business?
Gross margin varies widely by industry. Retail typically achieves 20–50%, services can be 50–80%, while manufacturing is often 25–40%. A healthy gross margin should cover operating expenses and still leave net profit. If your gross margin is too low, you may need to either raise prices or reduce cost of goods sold.
Should I include GST in my break-even calculation?
No — break-even calculations should use ex-GST prices. GST is collected on behalf of the ATO and is not part of your revenue or costs. Use prices excluding GST for all your markup, margin and break-even calculations. Use our GST Calculator to quickly convert between inc-GST and ex-GST prices.