Markup vs. Profit Margin Calculator Nepal (नाफा तथा मार्कअप क्यालकुलेटर)

Nepali Industry Benchmark Presets: Click to load industry margin targets

Pricing Parameters

Input your purchase cost and target profitability rate.

Cost Price per Unit (लागत मूल्य - NPR) *

Rs.

Calculation Target Mode

Markup Percentage (%) added to Cost

Gross Profit Margin (%) of Selling Price

Add statutory 13% Nepal VAT to final customer invoice / MRP

Calculated Selling Price

Cost Price

Gross Profit

Cost Share () Profit Share ()

Crucial Retail Insight: The Discount Trap

If you apply a markup to cost, you cannot offer a discount during festival sales! A discount on the selling price would eat into your cost capital, causing a net financial loss.

Markup vs. Margin Conversion Reference Matrix

Direct conversion factors showing why markup is always mathematically larger than profit margin.

Markup % (on Cost)	Equivalent Margin % (on Sales)	Cost Multiplier	Example: Cost Rs. 1,000 ➔ Selling Price
10.0%	9.09%	1.1x	Rs. 1.1000
15.0%	13.04%	1.15x	Rs. 1.1500
20.0%	16.67%	1.2x	Rs. 1.2000
25.0%	20.0%	1.25x	Rs. 1.2500
33.33%	25.0%	1.3333x	Rs. 1.3300
40.0%	28.57%	1.4x	Rs. 1.4000
50.0%	33.33%	1.5x	Rs. 1.5000
66.67%	40.0%	1.6667x	Rs. 1.6700
100.0%	50.0%	2.0x	Rs. 200
200.0%	66.67%	3.0x	Rs. 300

Frequently Asked Questions (FAQs)

Statutory retail pricing guidelines, 13% VAT rules, and profitability formulas for Nepal.

Markup is the percentage added directly to the Cost Price to arrive at the Selling Price (Markup = Profit ÷ Cost × 100). Margin (Gross Profit Margin) is the percentage of the final Selling Price that represents profit (Margin = Profit ÷ Selling Price × 100). For example, if an item costs Rs. 100 and sells for Rs. 125, the markup is 25%, but the profit margin is only 20%.

Many shopkeepers add 20% to cost assuming they are making a 20% profit margin. However, when offering a 20% promotional discount during Dashain, they actually lose money because a 20% discount on selling price is larger than the 20% markup on cost. Margin is always lower than markup on any positive profit.

Under the Nepal VAT Act 2052, 13% VAT is a tax collected on behalf of the Inland Revenue Department (IRD). True gross profit margin must always be calculated on the VAT-exclusive selling price. If an item sells for Rs. 1,130 including VAT, the true revenue is Rs. 1,000 and Rs. 130 is output VAT payable to IRD.

Margin % = [Markup % ÷ (100 + Markup %)] × 100. For example, 25% Markup = 25 ÷ 125 × 100 = 20% Margin.

Markup % = [Margin % ÷ (100 − Margin %)] × 100. For example, 20% Margin = 20 ÷ 80 × 100 = 25% Markup.

ByaparOS automatically enforces target margin thresholds across product categories. Whenever a salesperson or cashier creates an invoice or quotation with a price below the mandatory minimum margin floor, ByaparOS flags an instant margin warning, preventing selling at an accidental deficit.

Automate Retail Margins in ByaparOS

Never Sell Below Cost or Floor Margins Again

ByaparOS ERP and Cloud POS automatically calculates margins per line item, alerts cashiers when discounts violate profitability thresholds, and prints IRD-compliant 13% VAT invoices effortlessly.