Temu Profit Calculator UK
Work it either way: enter a base price and see exactly what you keep, or enter your costs and a target profit and get the lowest base price to set — with every step shown. Two things trip up Temu profit sums, and the calculator handles both: the base price you enter is excluding VAT, so Temu pays it on top and you remit it, and the customer’s delivery charge takes the VAT rate of the goods, so on zero-rated stock you keep the whole £2.00, not £1.67.
Your numbers
Prefilled with an example so you can see the maths work. Replace every figure with your own — courier rates and seller terms are negotiated per account, so none of these are a claim about yours.
The price you set in Seller Center. It is already ex-VAT — Temu adds its own customer-facing markup on top of it.
If not, there is no VAT on top and none inside the delivery charge, so you keep all of it whatever you sell.
This changes how much of the delivery charge you keep, because delivery takes the VAT liability of the goods. It does not change your price.
What one unit cost you to buy.
Enter your costs ex-VAT where you can reclaim the VAT on them in full. If you cannot reclaim it, enter the VAT-inclusive figure.
From your seller agreement. It starts at 0% because that is the rate on the UK local-seller accounts MaxInvent operates (September 2026): Temu earns on the markup it adds for the customer, not off your base price. If your agreement charges a percentage, enter it; the maths assumes it is charged on the base price.
What Temu charges the customer for delivery.
Temu drops the charge above an order-level threshold, and the published figures for it disagree. Rather than assume one, the answer shows both — the gap is what a free-delivery order costs you.
Where the money goes
Read it top to bottom: what lands from Temu, what you owe HMRC, then what the order costs you.
- Total paid by Temu (base price + VAT)
- £10.79
- VAT to HMRC (20%) — passes through, not yours
- − £1.80
- Revenue (ex-VAT) — this is your base price
- £8.99
- Item cost
- − £3.50
- Courier cost
- − £3.50
- Delivery charge kept (£2.00 less its VAT)
- + £1.67
- Packing
- − £0.50
- Commission (0%)
- − £0.00
- Total costs
- − £5.83
Net profit per order
£3.16
35.2% margin (profit ÷ base price) · 90.3% on the item cost (profit ÷ cost of goods)
The £2.00 delivery charge: what you keep
Delivery takes the VAT rate of the goods it delivers, so the same charge leaves you a different amount depending on what is in the parcel. Your selected rate is highlighted.
- 0% goodskeep £2.00 · no VAT inside
- 5% goodskeep £1.90 · VAT £0.10
- 20% goods — yourskeep £1.67 · VAT £0.33
Informative only — not tax advice. These figures are an estimate to help you sanity-check a price. Your VAT position depends on your goods, your registration, your delivery terms and any VAT scheme you are on. Confirm it with your accountant and against your own Temu seller terms before you rely on it.
One thing this cannot know. Temu only charges the customer for delivery below a basket threshold. On a larger basket you receive no delivery contribution and carry the courier cost in full. The basket is unknowable when you are pricing a single listing, so the calculator shows the charged and free cases side by side rather than guessing which one you will get.
Illustrative only, and not tax advice. Confirm your VAT treatment and your seller terms — the quickest proof is to check one real Temu remittance against the “total paid by Temu” figure above.
This is the same maths our software runs per listing
MaxInvent applies this to every Temu listing against your real cost prices and courier rates, and flags the ones losing money — including the zero-rated delivery rule above, which is easy to get wrong at scale.
Temu base price
For a UK-established seller accounting for its own VAT, the Temu base price is ex-VAT. Temu pays the base price plus VAT; the seller remits the VAT, so the base price is the revenue used in this calculation.
Delivery charge VAT
Where compulsory delivery forms part of the goods' single supply, it takes the goods' VAT rate. From a £2.00 charge a VAT-registered seller keeps £2.00 on zero-rated goods, £1.90 at 5%, or £1.67 at 20%, before courier cost.
Margin vs item-cost markup
Margin divides profit by the base price. Item-cost markup divides profit by the cost of goods. They are not interchangeable: the same percentage gives two different prices.
Is the Temu base price inclusive or exclusive of VAT?
Exclusive, and this is the distinction that matters: the base price you enter in Seller Center is a net figure, and it is not the retail price your customer sees. Temu applies its own customer-facing markup to arrive at that. When Temu settles with you, you receive the base price plus VAT, and you account for that VAT to HMRC.
The practical consequence, for a UK-established seller on this model, is that VAT should not be subtracted from your revenue in a Temu profit sum. A calculator that treats your £8.99 as VAT-inclusive reports £7.49 of revenue and understates your profit by £1.50 — money that was never yours to lose. Worse, if it then works backwards to suggest a price, it inflates every suggestion by the same multiplier, so a “25% margin” recommendation quietly delivers far more and loses you sales you never knew you were bidding for.
Verify it on your own account rather than taking our word for it. Take one Temu settlement line and compare it with the base price you entered: if the payment is the higher figure, VAT is arriving on top. That single check settles the question for your seller model and your terms.
How to price on Temu for a target profit
The calculator’s second mode does this for you and shows its working, but the method is short enough to do by hand:
- 1
Add up what the price must cover
Item cost, plus your courier cost, minus the part of the customer delivery charge you keep, plus packing. On the example figures that is £3.50 + £3.50 − £1.67 + £0.50 = £5.83.
- 2
Decide what your percentage is a percentage of
Margin means profit as a share of the base price. Item-cost markup means profit as a share of what the item cost you. The same number gives two different prices.
- 3
Work out how much of every £1 is left for costs
For a margin target, subtract your target and your commission rate from 100%. At 25% margin and 0% commission, 75p of every £1 is left for costs. For an item-cost markup target, only the commission comes off.
- 4
Divide, then round up to the next penny
£5.83 ÷ 0.75 = £7.773, so set at least £7.78. For a 25% item-cost markup, add 25% of £3.50 (£0.88) to the £5.83 and, with no commission, set at least £6.71. If you pay commission, recheck the rounded price with commission rounded to whole pence and go up a penny if it falls short.
- 5
Check it against the free-delivery case
On a basket that clears Temu's delivery threshold you keep nothing from the delivery charge, so the same 25% margin needs £10.00. Decide which case you are pricing for.
Temu margin vs markup: what does “30% profit” mean?
“I want 30% profit” is two different instructions depending on what the 30% is a percentage of, and the two answers are far apart. Margin is profit as a share of the base price: keep 30p out of every £1 Temu pays you. Item-cost markup is profit as a share of what the item cost you: earn 30p for every £1 you spent on stock. Courier and packing are covered in both cases, but only the item cost is marked up.
| 25% target read as | Base price | Profit | Margin | On item cost |
|---|---|---|---|---|
| Margin (profit ÷ price) | £7.78 | £1.95 | 25.1% | 55.7% |
| Item-cost markup (profit ÷ item cost) | £6.71 | £0.88 | 13.1% | 25.1% |
A £1.07 difference in price and more than double the profit, from the same “25%”. Neither is wrong; they answer different questions. Margin is what MaxInvent reports per listing; your price list or spreadsheet may well use item-cost markup. Pick one deliberately, and when you copy a target from a spreadsheet into a marketplace tool, check which one it expects.
How VAT affects the customer delivery charge
This part is worth real money if you sell food. Under the UK single-supply rule, a delivery charge takes the VAT liability of whatever it delivers. HMRC sets this out in VAT Notice 700/24: where the contract requires you to deliver the goods to the customer, delivery is part of that single supply, and itemising the charge separately does not change it.
Zero-rated goods: you keep the full charge
If the goods are zero-rated — most food, young children’s clothing — then the delivery of those goods is zero-rated too. There is no VAT inside the £2.00, so there is nothing to hand over and all £2.00 is yours, before your actual courier cost and any other deductions.
Standard-rated goods: £2.00 contains 33p of VAT
At 20% the same charge is VAT-inclusive, so £2.00 ÷ 1.2 leaves you £1.67 and 33p goes to HMRC. That 33p per parcel is the whole gap: a calculator that hard-codes a 20% divisor reports £1.67 for everyone and understates a zero-rated seller by 33p on every single order.
Reduced-rate, mixed baskets and the limits of this
Reduced-rate goods follow at 5%, leaving £1.90. A basket mixing rates may need the delivery charge apportioned fairly between them, which no single-listing calculator can do — including this one. And if delivery is genuinely optional or falls outside the sales contract, it is normally a separate standard-rated service instead. Note too that not all food is zero-rated: confectionery, crisps, ice cream, alcohol and soft drinks are standard-rated, as set out in VAT Notice 701/14.
The Temu profit and pricing formulas
Read the profit sum top-down, starting from what Temu actually pays you; every figure is one you can check against a remittance. The two pricing formulas are the same sum rearranged.
PROFIT FROM A PRICE
Total paid by Temu = base price + VAT
− VAT to HMRC (base price × rate)
= Revenue ex-VAT (this IS your base price, P)
− Item cost (C)
− Courier cost
+ Delivery kept (charge ÷ (1 + goods' rate))
− Packing
− Commission (P × r)
= Net profit
PRICE FOR A TARGET
F = C + (courier − delivery kept) + packing the costs to cover
r = commission rate as a fraction of P e.g. 0.08 for 8%
m = your target as a fraction e.g. 0.25 for 25%
Margin target: P = F ÷ (1 − m − r)
Item-cost markup target: P = (F + m × C) ÷ (1 − r)
Round P UP to the next penny, then check it through the profit sum.Worked examples on the figures the calculator opens with
£3.50 of goods, a £3.50 courier cost, 50p of packing, a £2.00 customer delivery charge and no commission.
| Scenario at £8.99 | Paid by Temu | Delivery kept | Total costs | Profit |
|---|---|---|---|---|
| Standard-rated, delivery charged | £10.79 | £1.67 | £5.83 | £3.16 |
| Zero-rated, delivery charged | £8.99 | £2.00 | £5.50 | £3.49 |
| Standard-rated, free delivery | £10.79 | £0.00 | £7.50 | £1.49 |
Same price, same courier: 33p of difference between the first two rows created purely by the VAT rate of the goods, and £1.67 lost in the third when the customer is not charged for delivery. Reversing the sum, a 25% margin on the standard-rated case needs a £7.78 base price when delivery is charged and £10.00 when it is free.
What if the customer gets free delivery?
Temu drops the delivery charge above an order-level basket threshold, and on those orders you receive no contribution and carry the courier cost in full. We deliberately do not publish a threshold figure: the numbers circulating publicly disagree with each other, and Temu’s own consumer pages describe free standard delivery. Since the basket is unknowable when you are pricing a single listing, the calculator shows both cases side by side — the gap is exactly what a free-delivery order costs you.
Temu seller fees UK: which commission rate should you use?
The one from your own seller agreement. Temu does not publish a rate card, so there is no single public answer. The field is prefilled at 0% because that is the rate on the UK local-seller accounts MaxInvent itself operates, as of September 2026: Temu earns on the markup it adds for the customer rather than deducting from the base price. Other Temu seller programmes are on different terms, and if your agreement charges a percentage of the base price, that is the figure to enter.
That is worth knowing because it makes Temu genuinely different from Amazon, eBay and TikTok Shop, where a percentage does come off what you receive. It also explains why comparing a Temu base price with a listing price on those channels is misleading — you are comparing your proceeds with someone else’s shelf price.
Check the basis as well as the number: the calculator assumes commission is charged on the base price, so a percentage that applies to delivery or to some other amount needs adjusting before you enter it. The same goes for the courier and packing costs — the prefilled figures are an illustration, and clearing any of them stops the calculator showing a figure rather than quietly treating the box as zero.
What this calculator does not include
- Returns, refunds and the restocking cost of a returned parcel.
- Promotions, coupons and any platform discount funded by you.
- Advertising and any account-level deductions.
- Mixed-rate baskets needing delivery apportioned between rates.
- The VAT Flat Rate Scheme, retail schemes, and margin schemes, all of which change the sums above.
- Overseas sellers and deemed-supplier cases, where the marketplace rather than you may account for the VAT.
Common questions
Does Temu add VAT to the seller base price?
For a UK-established seller accounting for its own VAT, yes: the base price is net, and VAT arrives on top and is then remitted by you. Confirm it against a real settlement line for your own seller model before relying on it.
What base price do I set on Temu to make a target profit?
Add up the costs the price must cover (item cost, courier less the delivery charge you keep, packing), then divide by the share of the price left after your target margin and commission. For a 25% margin with no commission, divide by 0.75. If your target is a percentage of the item cost instead, add that profit to the costs and divide by one minus the commission rate. Round up to the next penny, recalculate with commission rounded to whole pence, and go up a penny if it falls short. The calculator above does this and shows each step.
Is 25% margin the same as 25% markup?
No. Margin is profit divided by the base price. Item-cost markup is profit divided by what the item cost you. On the example figures, a 25% margin needs a £7.78 base price and earns £1.95; a 25% item-cost markup needs £6.71 and earns £0.88. Decide which one you mean before you copy a target between spreadsheets.
How much of the £2.00 Temu delivery charge do I keep?
Where delivery is part of the same supply as the goods, which is the normal position for a marketplace order that cannot be completed without it, the charge takes the goods' VAT rate: all £2.00 on zero-rated goods, £1.90 at the reduced rate, and £1.67 on standard-rated goods, before your courier cost. If you are not VAT-registered you keep all £2.00 whatever you sell.
I am not VAT-registered. Does any of this apply?
The delivery rule does not, because you charge no VAT and so have none to remit from the delivery charge. Set the registration question to No and the calculator stops adding VAT on top and credits the delivery charge in full.
Why does my profit change when I change the VAT rate?
Only through the delivery charge. Your base price is unaffected, because VAT on it is pass-through. If a tool changes your price when you change the rate, it is treating the price as VAT-inclusive, which is the error described at the top of this page.
Where these figures come from
- Delivery VAT treatment: HMRC VAT Notice 700/24 (single supply) and 701/14 (which food is zero-rated).
- Ex-VAT base price and 0% commission: MaxInvent’s own UK local-seller Temu accounts, checked against settlement lines. Your seller model may differ; verify on one of your own remittances.
- Everything else — courier, packing, commission, target — is your figure. The page publishes a method, not a rate card.
This calculator is an estimation tool for UK-established sellers. It is not tax, legal or accounting advice. VAT treatment depends on the seller, the goods, contractual delivery terms, where the stock sits and any VAT scheme in use. Confirm anything uncertain with a qualified adviser and against your current Temu seller terms. Marketplace names are trademarks of their respective owners.
Also useful: the marketplace fee calculator for comparing Temu against Amazon, eBay and TikTok Shop, how MaxInvent works for Temu sellers, and what marketplace selling really costs.