Every row is the same €6,802.00 cost priced to a different target. Read it from either side: the margin you want, and the markup that gets you there.
| Gross margin | Markup needed | Selling price | Profit |
|---|---|---|---|
| 10.0% | 11.1% | €7,557.78 | €755.78 |
| 15.0% | 17.6% | €8,002.35 | €1,200.35 |
| 20.0% | 25.0% | €8,502.50 | €1,700.50 |
| 25.0% | 33.3% | €9,069.33 | €2,267.33 |
| 30.0% | 42.9% | €9,717.14 | €2,915.14 |
| 35.0% | 53.8% | €10,464.62 | €3,662.62 |
| 40.0% | 66.7% | €11,336.67 | €4,534.67 |
| 50.0% | 100.0% | €13,604.00 | €6,802.00 |
A 20.0% margin is what a 25% markup gives you — the mix-up that costs operators money on every quote.
Markup and margin describe the same profit. Markup divides it by what the trip costs you; margin divides it by what the client pays. Because the price is bigger than the cost, the margin is always the smaller number.
price = cost × (1 + markup)price = cost ÷ (1 − margin)margin = markup ÷ (1 + markup)markup = margin ÷ (1 − margin)The example loaded above is a 7-day tour costing €6,802 for four travellers. Priced at a 25% margin it sells for €9,069.33. Priced with a 25% markup it would sell for €8,502.50 — €566.83 less, for the same “25%”.
On a single hotel night the difference is small change. On a group programme it is a salary. Set your company target in margin — it lines up with your accounts — and make sure whatever you quote in applies the mode you meant. The full explanation, with a printable conversion table, is in markup vs margin for tour operators.
To price a whole itinerary — per-person tickets, shared guides and vehicles, rooms at two sharing — use the tour price calculator. Selling to solo travellers? The single supplement calculator uses the same margin.
In the Deer Track itinerary builder you choose markup or margin once per trip; every line inherits it, any line can carry its own percentage, and switching mode converts the percentages so no price moves.
Divide the markup by one plus the markup: margin = markup ÷ (1 + markup). A 25% markup is 0.25 ÷ 1.25 = 20% margin; a 50% markup is a 33.3% margin.
Divide the margin by one minus the margin: markup = margin ÷ (1 − margin). A 25% margin needs a 0.25 ÷ 0.75 = 33.3% markup; a 20% margin needs a 25% markup.
Divide the net cost by one minus the margin: price = cost ÷ (1 − margin). A €6,802 trip at a 25% margin sells for €6,802 ÷ 0.75 = €9,069.33 before VAT. Multiplying by 1.25 instead gives only a 20% margin.
Neither is wrong; they describe the same profit differently. Most accountants report margin because it matches the profit and loss statement, while many sellers quote in markup because it is easy to apply to a supplier rate. Pick one for targets and convert once.
A 100% margin would mean the whole selling price is profit and the trip costs nothing. As the margin approaches 100% the required price grows without limit, so the calculator caps margin at 95%. Markup has no upper limit.
No. Work out markup and margin on prices before VAT or sales tax; the tax is collected for the government. Operators on a margin scheme (such as TOMS in the UK) pay VAT on the margin itself — check your own treatment with an accountant.
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