Temu Profit Calculator UK

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 is that VAT should never 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 VAT affects the customer delivery charge

This is the part most tools get wrong, and it 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 formula

Read it top-down, starting from what Temu actually pays you, and every figure is one you can check against a remittance:

Total paid by Temu   = base price + VAT
  − VAT to HMRC      (base price × rate)
  = Revenue ex-VAT   (this IS your base price)

  − Item cost
  − Courier cost
  + Delivery kept    (charge ÷ (1 + goods' rate))
  − Packing
  − Commission       (base price × your rate)
  = Net profit

Worked example, using the figures the calculator above opens with. Zero-rated stock at an £8.99 base price with £3.50 of goods, a £3.50 courier cost and 50p of packing: Temu pays £8.99 with no VAT, you keep the whole £2.00 delivery charge, so costs are £3.50 + £1.50 + £0.50 = £5.50 and profit is £3.49. On identical standard-rated stock you would keep £1.67 instead, costs become £5.83, and profit falls to £3.16. Same price, same courier, 33p of difference created purely by the VAT rate of the goods.

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 asks instead — run it both ways, and the gap is exactly what a free-delivery order costs you.

How much commission does Temu charge sellers?

Enter the rate from your own agreement — but on standard UK terms it is none, which is why the field is prefilled at 0%. This follows from how Temu’s pricing works rather than being a concession: you set a base price, Temu adds its own markup to reach the price the customer sees, and Temu’s margin is that markup. It does not need to deduct a commission from your base price because it has already taken its cut on top of it.

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.

The field stays editable because terms can be contractual and an account can sit on different ones. If yours does, enter it, and check the basis as well as the number: a percentage alone is not enough if the fee applies to delivery or to some other amount rather than to your base price. Figures circulating online range from zero to 30%, so your own agreement is the only reliable source. 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 profit 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.

How much of the £2.00 Temu delivery charge do I keep?

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.

Also useful: the marketplace fee calculator for comparing Temu against Amazon, eBay and TikTok Shop, and what marketplace selling really costs.