Price Increase Calculator
To undo this increase later you'd need a 7.4% cut, not 8.0%.
How the price increase calculation works
Multiply by 1 plus the increase
An 8% increase on $20 is $20 × 1.08 = $21.60.
To keep your margin, find it first
A $20 price on a $12 cost is a 40% margin: ($20 − $12) ÷ $20.
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)