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How to calculate your Etsy profit margin (UK)
Last checked 8 Oct 2026. Items marked date-sensitive can change; follow the source links before relying on them.
The formula, a worked £28.95 order with every Etsy fee itemised, the break-even price and the price you'd need for a 30% margin, with and without Offsite Ads.
Skip the maths: the Etsy UK fee & profit calculator shows net profit, margin and break-even price as you type.
The formula
Profit margin = (order total − Etsy fees − your costs) ÷ order total
- Order total: item price × quantity + postage you charge − any discount. For digital items sold to UK buyers, leave out the VAT Etsy adds, because it isn't yours.
- Etsy fees: listing, 6.5% transaction, 4% + £0.20 processing, 0.48% regulatory, Offsite Ads if the sale came from one, and 20% VAT on those fees if you have no VAT ID. See every fee explained.
- Your costs: materials, packaging, the postage you actually pay, and anything else that scales with the sale.
Worked example date-sensitive
Example figures (made up for illustration): item £25.00, postage charged £3.95, not VAT-registered, no Offsite Ads. Costs: materials £5.80 + packaging £0.80 + Royal Mail postage paid £2.90 = £9.50.
| Line | Working | Amount |
|---|---|---|
| Order total | £25.00 + £3.95 | £28.95 |
| Listing fee | $0.20 ≈ £0.15 | £0.15 |
| Transaction fee | 6.5% × £28.95 | £1.88 |
| Processing | 4% × £28.95 + £0.20 | £1.36 |
| Regulatory Operating Fee | 0.48% × £28.95 | £0.14 |
| VAT on fees | 20% × £3.53 | £0.71 |
| Total Etsy fees | £4.23 | |
| Your costs | £9.50 | |
| Net profit | £28.95 − £4.23 − £9.50 | £15.22 |
| Profit margin | £15.22 ÷ £28.95 | 52.6% |
Lines are rounded to the penny, so they may not add up exactly. The totals use unrounded values (same as the calculator).
Same sale through Offsite Ads (15%): fees rise to £9.45, net profit falls to £10.00 and margin to 34.6%.
Break-even and target prices for this example
Keeping postage charged (£3.95) and costs (£9.50) fixed and changing only the item price:
| Normal sale | Offsite Ads sale | |
|---|---|---|
| Break-even item price (profit = £0) | £7.48 | £10.47 |
| Item price for a 30% margin | £13.51 | £21.61 |
Price for Offsite Ads sales too. Until your shop passes $10,000 USD in a year you can opt out. After that they're compulsory, at 12% (Etsy Help).
Margin isn't markup
Markup compares profit with costs: £15.22 ÷ £9.50 = 160%. Margin compares profit with the order total: 52.6%. People often say "50%" when they mean one or the other. Margin is the one that shows how much of each pound you keep.
What's a good Etsy profit margin?
Etsy doesn't publish a benchmark, and I won't invent one. A margin is only "good" if it covers what the formula leaves out:
- your time (the formula above pays you £0 an hour)
- Etsy Ads, if you run them
- refunds, breakages and lost parcels
- fixed costs that don't scale with each sale (equipment, software, the shop set-up fee)
- income tax, and VAT on your sales if you're registered (then take the VAT out of the order total first; see the VAT guide)
Sources
- Etsy Help: What are the fees and taxes for selling on Etsy?
- Etsy Help: Payment processing fees (UK: 4% + £0.20)
- Etsy Help: Regulatory Operating Fee (UK: 0.48%)
- Etsy Help: How Etsy's Offsite Ads work
- Etsy Help: How VAT is collected on seller fees
- Etsy Help: How VAT works on digital items
- Etsy: Sell on Etsy (UK fee summary)
- GOV.UK: VAT rates
Related
- Free Etsy UK fee & profit calculator (runs in your browser)
- Etsy UK fees explained
- Etsy VAT for UK sellers: fees and digital downloads
FAQ
How do I calculate profit margin on Etsy?
Take the order total (item price plus postage charged, minus discounts), subtract all Etsy fees (including VAT on fees if you have no VAT ID) and your own costs, then divide by the order total. For example, (£28.95 − £4.23 − £9.50) ÷ £28.95 = 52.6%.
What percentage of my sale does Etsy take in the UK?
For a normal sale with no Offsite Ads, about 13.2% of the order total plus £0.42, if you're not VAT-registered. A sale from Offsite Ads costs about 31.2% + £0.42.
Should postage be included in the order total?
Yes. Etsy charges its transaction, processing and regulatory fees on postage too. Count the postage you charge in the order total and the postage you pay in your costs.
What is a good profit margin for Etsy?
Etsy doesn't publish one. Your margin has to cover your time, ads, refunds, fixed costs and tax, none of which the basic formula includes. Work out your own target from those.
What's the difference between margin and markup?
Margin is profit ÷ order total. Markup is profit ÷ costs. In the example, margin is 52.6% and markup is 160%.