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    Profit margin calculator

    Enter the cost and selling price before VAT: margin, rates and multiplier appear.

    Margin, markup and margin rate

    Gross margin before VAT

    €25.00

    Multiplier (coefficient)

    1.625

    Markup (taux de marge)

    62.5%

    Margin rate (taux de marque)

    38.46%

    VAT for the price incl. VAT

    Margin = 65 − 40 = €25.00; markup = 25 ÷ 40 × 100 = 62.5%; margin rate = 25 ÷ 65 × 100 = 38.4615%; multiplier = 65 ÷ 40 = 1.625; price incl. VAT = 65 × 1.2 = €78.00

    Selling price from a target

    Selling price before VAT

    €61.54

    Price incl. VAT (20%)

    €73.85

    VAT for the price incl. VAT

    Margin €21.54 · markup 53.85% · margin rate 35% · multiplier 1.5385

    Selling price before VAT = 40 ÷ (1 − 35 ÷ 100) = 40 ÷ 0.65 = €61.54; price incl. VAT = 61.54 × 1.2 = €73.85

    Profit margin calculator: markup and margin in French terms

    This profit margin calculator starts from two prices before VAT: the margin is the selling price minus the cost price. An item bought for €40 and sold for €65, both HT (hors taxes, before VAT), earns a €25 margin. The tool then shows that margin three ways as soon as you type the two prices: the markup, which French accountants call taux de marge and calculate on the cost price (25 ÷ 40 = 62.5%); the margin rate, called taux de marque and calculated on the selling price (25 ÷ 65 = 38.46%); and the multiplier, or coefficient (65 ÷ 40 = 1.625). The second block works backwards from a cost and a target to the selling price before VAT and the price including French VAT. The main limit: this is a trading margin, not a profit, since rent, wages and other costs are still paid out of it.

    Taux de marge versus taux de marque

    The trap for English speakers working in France is vocabulary. In everyday English "margin" usually means the share of the selling price, which in French is the taux de marque. The French taux de marge, which sounds like "margin rate", is in fact a markup on cost. A French supplier, accountant or franchise contract quoting "50 % de marge" may mean either, so always check the base. The coefficient, the number you multiply the cost by, avoids the ambiguity: a coefficient of 2 is a 100% markup and a 50% margin.

    You can convert one into the other without the prices: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin), with rates written as decimals. Insee, the French statistics office, defines the trading margin on prices before VAT and includes customs duties, transport, packaging and insurance in the cost of goods sold.

    Markup (taux de marge)Margin rate (taux de marque)MultiplierSelling price before VAT
    10%9.09%1.1€11.00
    20%16.67%1.2€12.00
    25%20%1.25€12.50
    30%23.08%1.3€13.00
    40%28.57%1.4€14.00
    50%33.33%1.5€15.00
    60%37.5%1.6€16.00
    75%42.86%1.75€17.50
    100%50%2€20.00
    150%60%2.5€25.00
    200%66.67%3€30.00

    Setting a selling price in France

    Start from the full cost per unit: supplier price before VAT, plus shipping, customs and packaging, minus discounts. Pick a target margin or multiplier from what the margin must pay for, and read the selling price before VAT in the second block. Then add VAT at the rate for your product; prices displayed to French consumers must include it. If you round the shelf price to €29.90, type the matching HT price in the first block to see the margin you really keep. The French VAT calculator converts a shelf price back to HT, and the percentage calculator helps with discounts.

    Frequently asked questions

    What is the difference between taux de marge and taux de marque?

    Both divide the same margin by a different base. The taux de marge is the margin divided by the cost price, what English speakers call markup. The taux de marque is the margin divided by the selling price, the usual meaning of margin or gross margin percentage. Bought at €40 and sold at €65, the markup is 62.5% and the margin 38.46%, before VAT in both cases.

    My French supplier talks about a 50% margin, which one is it?

    Ask which base they use, because the gap is large. A 50% taux de marge on an item bought for €10 before VAT gives a selling price of €15; a 50% taux de marque gives €20. French retail chains and franchise networks often reason in taux de marque or in coefficient, the multiplier applied to cost, which removes any doubt about the base.

    I use a multiplier of 2 on my cost, what margin does that give?

    A coefficient of 2 on the cost before VAT is a 100% markup and a 50% margin: half the selling price before VAT is margin. If your multiplier of 2 produces the shelf price including VAT, the VAT sits inside it and the real margin is lower: at 20% VAT the price before tax is only 1.67 times the cost, which is a 40% margin.

    Should margin be calculated before or after French VAT?

    Before VAT, on HT prices. The VAT you collect on a sale is not yours: you pass it to the French tax office after deducting the VAT paid on your purchases. A margin worked out on TTC prices is inflated by 20% at the standard rate. The calculator takes both prices HT and uses the VAT rate only to show the TTC price you would display in a shop.

    Can a margin rate reach 100%?

    No. The taux de marque is the share of margin in the selling price, so 100% would mean the goods cost nothing. As the target margin approaches 100%, the price shoots up: 80% needs a multiplier of 5 and 90% a multiplier of 10. The calculator brings any value of 100% or more down to 99.99% and says so. Markup, on the other hand, has no ceiling.

    Sources

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