Home/Business Tools/Pricing Calculator
Business Pricing

Pricing Calculator (Cost-Plus & Margin)

Work out the right selling price for your product or service from your cost and target profit margin, with GST added on top so you know exactly what the customer pays.

Advertisement
Pricing Calculator
Set the right price — cost-plus or target-margin pricing
30%
Cost-plus pricing formula: Price = Cost / (1 − Margin%)
Ensures you always cover costs + achieve target margin
Enter cost and margin to calculate price

Disclaimer. This calculator is provided for educational and informational purposes only. Results are estimations and do not constitute professional financial, legal, or accounting advice. Consult a qualified advisor, accountant, or company secretary before making business decisions. Read full disclaimer →

About Product Pricing Calculator

Pricing strategy has three common foundations: Cost-plus pricing (costs plus target markup); Value-based pricing (price set by perceived customer value); Competitive pricing (set relative to competitor prices). Cost-plus formula: Selling Price = (Variable Cost + Fixed Cost allocation) / (1 - Target Margin). For services: hourly rate = (Annual salary + overheads + profit) / billable hours per year.

Psychological pricing insights: prices ending in 9 (Rs 999, Rs 4,999) consistently outperform round numbers due to left-digit anchoring effect. Three-tier pricing (good, better, best) steers customers toward the middle option (compromise effect). Price anchoring increases perceived value. For SaaS or subscription businesses, focus on LTV to CAC ratio (should be above 3:1) rather than unit margin when setting pricing strategy.

Frequently Asked Questions

Cost-plus pricing sets the selling price using the formula: Selling Price = Cost / (1 − Target Margin). For example, a product costing ₹5,000 with a 30% target margin is priced at 5,000 / 0.70 = ₹7,143 (before GST). This ensures you always cover your cost and hit your target margin, unlike simply adding a fixed markup on top of cost.
Margin is profit divided by the selling price, while markup is profit divided by cost — they are not the same number. A 30% margin actually corresponds to roughly a 42.9% markup on cost. This calculator shows both the margin you asked for and the resulting markup %, so you don't accidentally under-price by confusing the two when quoting clients.
This is the left-digit anchoring effect: shoppers process the first digit of a price much more strongly than the rest, so ₹999 registers as "900-something" rather than "basically ₹1,000". Charm pricing (prices ending in 9) consistently outperforms round numbers in conversion tests, and three-tier pricing (good/better/best) further nudges buyers toward the middle option through the compromise effect.
For SaaS and subscription businesses, aim for a Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC) ratio above 3:1 — meaning each customer should generate at least three times what it cost to acquire them. When pricing a subscription product, prioritise this ratio over raw per-unit margin, since it captures the full economics of retention and payback period.
Advertisement

Related: Profit Margin Calculator · Subscription Cost Calculator · All Business Tools