Resource

Calculator formulas & test cases

Every formula PoundKit's calculators use, plus worked test cases you can reproduce by hand or in a spreadsheet. Use it as a reference or as a smoke test if you build on top of these tools.

VAT calculator

Add VAT

vat = net × rate/100
gross = net + vat

Remove VAT

net = gross / (1 + rate/100)
vat = gross − net

Input	Expected result	Notes
Add 20% VAT to £100	Net £100 · VAT £20 · Gross £120
Remove 20% VAT from £120	Net £100 · VAT £20 · Gross £120
Add 5% VAT to £200	Net £200 · VAT £10 · Gross £210
Add 12.5% VAT to £80	Net £80 · VAT £10 · Gross £90	Custom rate

Standard UK rate is 20%; reduced 5%; zero-rated 0%. Which rate applies is a product-classification question — see GOV.UK VAT rates.

Profit margin & markup

Margin

margin% = (revenue − cost) / revenue × 100

Markup

markup% = (revenue − cost) / cost × 100

Target price from margin

price = cost / (1 − targetMargin/100)

Input	Expected result	Notes
Revenue £200, cost £120	Margin 40% · Markup 66.67%
Cost £50, target margin 30%	Selling price £71.43	price = cost / (1 - margin)
Cost £50, markup 30%	Selling price £65.00	price = cost * (1 + markup)

Break-even

Break-even units

units = fixedCosts / (price − variableCost)

With target profit

units = (fixedCosts + targetProfit) / (price − variableCost)

Input	Expected result	Notes
Fixed £10,000; price £50; variable £30	500 units	Contribution per unit = £20
Fixed £10,000; price £50; variable £30; target profit £5,000	750 units

Freelance rate

Day rate

dayRate = (targetIncome + overheads) / billableDays

Hourly rate

hourlyRate = dayRate / hoursPerDay

Input	Expected result	Notes
Target £45,000/yr · 220 billable days · 6.5 hrs/day	Day rate ≈ £205 · Hourly ≈ £32	Overheads 0
Target £60,000 · overheads £8,000 · 200 days · 7 hrs/day	Day rate £340 · Hourly ≈ £49

Invoice totals

Per-line

lineNet  = qty × price
lineVat  = lineNet × vatRate/100
lineGross = lineNet + lineVat

Document totals

net   = Σ lineNet
vat   = Σ lineVat
gross = net + vat

Input	Expected result	Notes
Line: 4 × £550 @ 20% VAT	Net £2,200 · VAT £440 · Gross £2,640
Line: 1 × £100 @ 5% VAT + Line: 1 × £800 @ 20% VAT	Net £900 · VAT £165 · Gross £1,065

Quote totals (with discount)

Per-line (with discount)

lineNet  = qty × price × (1 − discount/100)
lineVat  = lineNet × vatRate/100

Input	Expected result	Notes
1 × £3,200 @ 20% VAT, no discount	Net £3,200 · VAT £640 · Gross £3,840
2 × £450 @ 20% VAT, 10% discount	Net £810 · VAT £162 · Gross £972	lineNet = qty × price × (1 − discount/100)

Official sources

Try the calculators

VAT Calculator →

Add or remove VAT at 20%, 5% or 0%.

Profit Margin →

Margin, markup, target price.

Break-even →

Units to cover costs / hit profit.

Freelance Rate →

Turn a target income into a day rate.

Invoice Generator →

Build a UK invoice, live totals.

Quote Template →

Send a quote before invoicing.

Not tax advice. Contact us if you spot a mistake in a formula or a worked example.