Business Calculators

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Pricing and reimbursement: two different questions

These tools cover two unrelated jobs. The first is pricing, turning a cost into a selling price. The second is reimbursement, working out what a business owes for mileage driven for work. They share a page only because both are routine small-business arithmetic.

On pricing, the single most valuable distinction is markup versus margin, because they are computed on different bases and are never equal. Markup is the percentage added to cost; margin is the share of the selling price that is profit. A 50% markup is a 33.3% margin, same price, different statement, and confusing them quietly destroys profitability.

Use the markup percentage calculator to price from cost, and the mileage reimbursement calculator for the current IRS standard rate applied to your business miles.

Common mistakes to avoid

• Using markup and margin interchangeably, they are calculated on different bases.
• Reconstructing a mileage log at year end instead of recording trips as they happen.
• Mixing commuting miles with business miles; commuting is generally not reimbursable business mileage.
• Adding a percentage to cost without checking that the resulting price still covers overhead.
• Assuming one rate applies for the whole year when a mid-year rate change occurred.

Frequently asked questions