Pricing & profit / Price Increase Calculator

Price Increase Calculator

Get a new price from a percentage increase, or the price that keeps your margin when a supplier raises your cost.
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New price
$21.60
$1.60increase
8.0%increase %
Current price$20.00
Price increase · 8.0%+$1.60
New price$21.60

To undo this increase later you'd need a 7.4% cut, not 8.0%.

See breakdown

How the price increase calculation works

  1. Multiply by 1 plus the increase

    An 8% increase on $20 is $20 × 1.08 = $21.60.

  2. To keep your margin, find it first

    A $20 price on a $12 cost is a 40% margin: ($20 − $12) ÷ $20.

  3. Divide the new cost by (1 − margin)

    If the cost goes to $13.50, $13.50 ÷ 0.60 = $22.50 keeps the 40% margin. Adding just the $1.50 to $20 would give $21.50 and drop it to 37.2%.

Worked example. A $20 item goes up 8%. The increase is $1.60, so the new price is $21.60.

Price Increase FAQ

How do I calculate a price increase?

Multiply the current price by 1 plus the percentage as a decimal. A 5% rise on $40 is $40 × 1.05 = $42.

How do I work out a price increase as a percentage?

Subtract the old price from the new one, divide by the old price and multiply by 100. $20 to $21.60 is $1.60 ÷ $20 = 8%.

My supplier raised costs. How much should I raise my price?

Enough to keep your margin: new cost ÷ (1 − margin). Only passing on the dollar increase keeps your profit per item but lowers your margin.

Does a 10% increase followed by a 10% cut get me back to the start?

No. $100 up 10% is $110, and 10% off $110 is $99. Each change is taken from a different base.

If my cost goes up 12.5%, how much should my price go up?

Also 12.5%, if you want to keep the same margin. Keeping the margin means price and cost rise by the same percentage: a $12 cost going to $13.50 is +12.5%, and $20 × 1.125 = $22.50. If you price with a markup, multiplying the new cost by the same markup gives the same answer: $13.50 × ($20 ÷ $12) = $22.50.

How much should I raise prices for inflation?

Start with your own cost increases, not the headline figure, because your costs can rise faster or slower than general prices. As a reference, the US Consumer Price Index (CPI-U) rose 3.7% in the 12 months to September 2026, according to the Bureau of Labor Statistics. A $20 price raised by 3.7% is $20 × 1.037 = $20.74. Enter the rate you choose as the price increase.

How many sales can I lose after a price increase and still make the same profit?

Divide the increase by (margin + increase), both as a share of the old price. With a 40% margin, an 8% increase lets you lose up to 0.08 ÷ 0.48 = 16.7% of units before gross profit falls: profit per item goes from $8.00 to $9.60, and $8.00 ÷ $9.60 = 83.3% of the old volume earns the same. The price elasticity calculator estimates how many sales you will actually lose.

Sources: U.S. Bureau of Labor Statistics: Consumer Price Index, September 2026 (released 14 Oct 2026)

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