Markup: What to Check Before You Trust the Number

Updated 22 August 2026 · Business and gst

A Markup Calculator gives a fast answer, but the answer is only as good as what goes in. These are the mistakes we see most often with markup calculations in Australia, and how to avoid them.

1. Spending GST collected

GST belongs to the ATO. Keep it aside until your BAS is due.

2. Undercharging as a contractor

Your rate must cover super, leave, unbilled time and business costs, not just the salary you want.

3. Forgetting on-costs

An employee costs well above their salary once super, workers comp and payroll tax are included.

4. Mixing up margin and markup

A 50% markup is a 33% margin. Pricing with the wrong one can erase profit.

5. Overlooking the detail that matters most here

A 50% markup gives only a 33% margin. Don’t mix the two when setting prices.

How the selling price (excl. GST) changes with markup

A common mistake is getting one input slightly wrong. Here is what happens to the selling price (excl. GST) when “Markup (%)” is off by up to 20% in either direction, with everything else held steady.

Markup (%)	Selling price (excl. GST)
40	$84.00
45	$87.00
50	$90.00
55	$93.00
60	$96.00

At 40 the result is $84.00; at 60 it is $96.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.

A quick sense check

Price = cost × (1 + markup ÷ 100). With typical inputs the calculator returns selling price (excl. GST) of $90.00. If your own result looks wildly different, check that each figure is in the right unit and period (weekly, monthly or yearly) before drawing conclusions.