How Calculations Work
This calculator uses publicly available UK tax information including:
- • Standard UK VAT rates
- • Income tax thresholds
- • National Insurance contribution bands
- • Generalised e-commerce cost assumptions
The tool does not account for individual tax circumstances, reliefs, special accounting schemes, or complex company structures unless explicitly selected by the user.
How this calculator works
E-commerce calculation logic:
- Revenue = Product Price × Units Sold
- Net Revenue = Revenue × (1 - Refund Rate %)
- Payment Processing Fee = Net Revenue × Processing %
- Product Costs = Product Cost per Unit × Units
- Shipping Costs = Shipping per Unit × Units
- Total Costs = Product Costs + Shipping Costs + Processing Fee + Fixed Costs
- Net Profit = Net Revenue − Total Costs
- Margin % = Net Profit / Net Revenue
- Contribution Margin per Unit = Selling Price − Product Cost − Shipping − (Selling Price × Processing %)
- Break-even Units = Fixed Costs / Contribution Margin per Unit
- Break-even Revenue = Break-even Units × Selling Price
- If Target Monthly Profit is entered:
- Required Units = (Fixed Costs + Target Profit) / Contribution Margin per Unit
- Required Revenue = Required Units × Selling Price
Processing is calculated from Net Revenue.
Refunds reduce revenue BEFORE fees.
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VAT (if enabled) is excluded from profit path unless explicitly toggled.