Ask W Calculator [ Not AI ] Margin, Markup and ROI
Pricing, ROI, and VAT Calculator for Philippine Businesses and MSMEs
Direct Answer
Direct Answer: Margin is gross profit as a percentage of the selling price. Markup is gross profit as a percentage of the cost. ROI is net profit as a percentage of total investment. For a product that costs ₱100 and sells for ₱150, the margin is 33.33 percent and the markup is 50 percent. If you spend ₱10,000 on an activity and gain ₱13,000, the ROI is 30 percent. This calculator computes all three, plus the selling price required to hit a target margin, markup, or ROI. A VAT treatment option handles 12 percent Philippine VAT in both directions: VAT-inclusive and VAT-exclusive.
VAT Treatment
Are your input prices VAT-inclusive or VAT-exclusive?
12% Philippine VAT. Default: no VAT.
Choose a Calculation Mode
Calculation Result
Margin and Markup Conversion Table
| Margin | Markup | Multiplier on Cost | Example: Cost ₱100 |
|---|---|---|---|
| 5% | 5.26% | 1.0526× | ₱105.26 |
| 10% | 11.11% | 1.1111× | ₱111.11 |
| 15% | 17.65% | 1.1765× | ₱117.65 |
| 20% | 25% | 1.25× | ₱125.00 |
| 25% | 33.33% | 1.3333× | ₱133.33 |
| 30% | 42.86% | 1.4286× | ₱142.86 |
| 35% | 53.85% | 1.5385× | ₱153.85 |
| 40% | 66.67% | 1.6667× | ₱166.67 |
| 45% | 81.82% | 1.8182× | ₱181.82 |
| 50% | 100% | 2× | ₱200.00 |
| 60% | 150% | 2.5× | ₱250.00 |
| 75% | 300% | 4× | ₱400.00 |
ROI Example Table
| Investment | Return | Net Profit | ROI |
|---|---|---|---|
| ₱10,000.00 | ₱13,000.00 | ₱3,000.00 | 30% |
| ₱10,000.00 | ₱15,000.00 | ₱5,000.00 | 50% |
| ₱10,000.00 | ₱20,000.00 | ₱10,000.00 | 100% |
| ₱50,000.00 | ₱57,500.00 | ₱7,500.00 | 15% |
| ₱100,000.00 | ₱85,000.00 | −₱15,000.00 | −15% |
Definitions
What is margin?
Margin is gross profit expressed as a percentage of the selling price. Gross profit is the selling price minus the cost. A product that costs ₱100 and sells for ₱150 has gross profit of ₱50. As a percentage of the ₱150 selling price, that is 33.33 percent margin.
What is markup?
Markup is gross profit expressed as a percentage of the cost. The same product with ₱50 gross profit and ₱100 cost has a 50 percent markup. Markup and margin always describe the same peso profit. They differ only in the base they use.
What is ROI?
Return on Investment is net profit divided by total investment. If you spend ₱10,000 on a marketing campaign and the campaign produces ₱13,000 in gross profit, the net profit is ₱3,000 and the ROI is 30 percent. ROI measures the profitability of an activity or investment, not of a single product.
How do margin, markup, and ROI relate?
Margin and markup apply to individual products. ROI applies to investments and activities. A business can have strong margin on every product and still have low ROI if overhead, marketing, or operational costs consume the profit. The three metrics answer different questions and should be used together.
How does VAT treatment work?
Philippine VAT is 12 percent. If your input prices are VAT-inclusive, the calculator strips the VAT from both cost and price before computing margin and markup. If your input prices are VAT-exclusive, the calculator adds 12 percent on top and shows the VAT-inclusive price. Margin and markup are always computed on VAT-exclusive values. If you are not VAT-registered, leave the control on No VAT.
Frequently Asked Questions
What is the difference between margin and markup?
Margin is gross profit as a percentage of the selling price. Markup is gross profit as a percentage of the cost. A product that costs ₱100 and sells for ₱150 has a margin of 33.33 percent and a markup of 50 percent. The two percentages describe the same profit from different bases.
How do I convert margin to markup?
Markup equals margin divided by one minus margin. A 30 percent margin converts to a 42.86 percent markup. A 50 percent margin converts to a 100 percent markup. The conversion is exact, not an approximation.
What is a good margin for a Philippine MSME?
There is no single answer. Margin depends on the product category, the competition, the cost structure, and whether the business sells wholesale or retail. In general, higher margin provides more room for discounts, marketing, and unexpected costs. Most distribution businesses operate between 10 and 30 percent gross margin, and retail between 30 and 50 percent.
What is ROI and how is it different from margin?
Return on Investment is net profit divided by total cost, expressed as a percentage. Margin measures the profitability of a single product. ROI measures the profitability of an activity, an investment, or a period of operations. A business can have a strong product margin and still have a low ROI if overhead or marketing costs consume the profit.
How do I calculate my selling price from a target margin?
Selling price equals cost divided by one minus target margin. If cost is ₱100 and target margin is 40 percent, the selling price is ₱100 divided by 0.6, which equals ₱166.67. The markup on that price is 66.67 percent.
What is a good ROI for a small business?
A common benchmark is 15 to 30 percent annual ROI on business investments. For inventory or short-term marketing spend, the ROI is often measured monthly or per campaign and can be much higher. What matters is whether the ROI exceeds the cost of capital, which for most MSMEs is the interest they would pay on a loan.
Does this calculator use AI?
No. Ask W Margin, Markup, and ROI [Not AI] is a deterministic calculator. Every result is arithmetic computed in the browser. There is no AI, no inference, and no interpretation. The formulas are public and the outputs are reproducible.
Can I use this for both wholesale and retail pricing?
Yes. The formulas are the same for wholesale and retail. What changes is the target margin. Wholesale businesses typically operate at lower margins than retail because their transaction volumes are higher and their buyers are resellers.
How does the VAT treatment option work?
The calculator offers three VAT treatments: No VAT, Prices are VAT-inclusive, and Prices are VAT-exclusive. With No VAT, the inputs are used as-is. With VAT-inclusive, the 12 percent Philippine VAT is stripped from both the cost and the price before margin and markup are computed, and the VAT-exclusive price and VAT amount are shown. With VAT-exclusive, the 12 percent VAT is added on top and the VAT-inclusive price is shown. Margin and markup are always computed on VAT-exclusive values, which is the standard convention for VAT-registered Philippine businesses. The default is No VAT.
Does the calculator handle income tax, shipping, or overhead?
No. The calculator handles VAT treatment only. It does not handle income tax, shipping, platform fees, or overhead. It computes gross margin, gross markup, and gross ROI. For net figures, subtract those costs from the gross profit before entering the values.
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Notes and Sources
Formulas used. Margin = (Price − Cost) / Price. Markup = (Price − Cost) / Cost. ROI = (Gain − Investment) / Investment. Selling price from target margin = Cost / (1 − Target Margin). Selling price from target markup = Cost × (1 + Target Markup). Required gain from target ROI = Investment × (1 + Target ROI). VAT-exclusive amount = VAT-inclusive amount / 1.12. VAT-inclusive amount = VAT-exclusive amount × 1.12. VAT amount = VAT-inclusive − VAT-exclusive.
Currency. All figures are in Philippine pesos. The formulas are currency-agnostic and can be applied to any currency by replacing the peso sign.
VAT handled, income tax and overhead not. The calculator handles 12 percent Philippine VAT through the VAT treatment control. It does not handle income tax, shipping, platform fees, or overhead. It computes gross margin, gross markup, and gross ROI. For net figures, subtract those costs from the gross profit before entering the values.
Verified 2026-09-29. Formulas are static. The 12 percent Philippine VAT rate is current as of verification. Confirm your own cost and price inputs are current.