Price that includes GST while hitting a target net margin.
Display price (GST inclusive)
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Net to seller
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GST component
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Margin amount
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Why a sticker price and a margin pull in opposite directions
When you advertise one all-in price to a customer, that figure has to do two jobs at once. It must leave you the margin you need after cost, and it must contain the sales tax you are legally obliged to hand over. Get the order of operations wrong and you either eat the tax out of your margin or quietly overcharge. This tool sets the price the right way round: it marks your cost up to the net amount you want to keep, then layers the sales tax on top, so the displayed number is genuinely tax-inclusive while still protecting your margin.
The structure depends on what you are selling. Goods carry the federal sales tax administered by the Federal Board of Revenue (FBR), which the tool models at 18%. Services instead carry a provincial rate set by bodies like the Sindh Revenue Board or the Punjab Revenue Authority, modelled here at 15% and 16% respectively. These specific percentages are the figures the calculator applies, not a guarantee of the current law, so confirm the live rate for your goods or service with the FBR or your provincial authority. The arithmetic, however, never changes.
Pricing a PKR 800 item to keep a 30% margin
Suppose an item costs you PKR 800, you want a 30% net margin, and it is a good taxed at 18%. The key move is that a 30% margin means cost is 70% of your net price, so the net is cost divided by 0.7, not cost times 1.3. From there the tax sits on top.
| Step | Working | Amount |
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So you advertise PKR 1,349. Of that, PKR 206 is tax you pass to the FBR, PKR 800 is your cost, and PKR 343 is the margin you keep. The chart makes the three slices of the sticker price visible.
Goods, services, and the registration question
Choosing the wrong rate is the most common pricing error, and it is easy to make because federal and provincial regimes overlap in everyday business. A web designer in Karachi charges the Sindh services rate; a shop selling the goods they produce charges the federal 18%. Some businesses do both and must split their invoices. Switch the supply type in the tool and watch the display price move while your net stays put, because the tax is what changes, not your margin. If you are not registered for sales tax, you generally should not be adding it to invoices at all, so confirm your registration status and the correct authority before you build tax into a price.
A practical tip on input tax
The PKR 206 in the example is output tax you collect. If you are a registered business, you can usually offset the sales tax you paid on your own purchases, the input tax, against it, so the amount you actually remit is the difference, not the full PKR 206. This pricing tool deliberately ignores input tax to keep the sticker price clean; net off your input tax separately when you file your return.
Is a 30% margin the same as a 30% markup?
No, and mixing them up is a frequent costing mistake. A 30% margin means margin is 30% of the selling price, so you divide cost by 0.7. A 30% markup means you add 30% to cost, so you multiply by 1.3. On a PKR 800 cost the margin method gives a net of PKR 1,143 while the markup method gives only PKR 1,040. This calculator uses the margin definition.
How do I back the tax out of a price already shown as inclusive?
Divide the inclusive price by one plus the rate to recover the net, then the remainder is the tax. For PKR 1,349 at 18%, the net is 1,349 divided by 1.18, which returns PKR 1,143, leaving PKR 206 of GST. That is the reverse of what the tool does and a useful check when a supplier quotes you an all-in figure.