VAT left in the takings
The European mistake, and the one US-built calculators make by design. At a 19% rate the tax is 16,0% of everything a customer pays, so leaving it in turns the tax office’s money into profit on every order.
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Shopify profit calculator
What your store actually made this month, from what customers paid down to EBITDA. Refunds come off first, the VAT inside what you kept comes out next, and every cost lands on the line of a real P&L it belongs to.
What the month left you, EBITDA
€7.285,00
14Net revenue
€57.000,00
after refunds and VAT
29CM3
25,1%
kept after the ads
With VAT left in
€18.115,00
what a US-built calculator shows
Your month
What customers paid
These figures are
European prices: the VAT comes out of what you kept, after refunds.
What the month cost
↑ ↓ to nudge, Shift for ten. Commas or dots both work.
The statement
7Gross revenue€73.780,00
10Returns−€5.950,00
12VAT−€10.830,00
14Net revenue€57.000,00100,0%
17Cost of goods−€21.660,0038,0%
19CM1€35.340,0062,0%
21Logistics−€4.480,007,9%
23Payment fees−€1.575,002,8%
25CM2€29.285,0051,4%
27Marketing−€15.000,0026,3%
29CM3€14.285,0025,1%
31Overhead−€7.000,0012,3%
33EBITDA€7.285,0012,8%
€10.830,00 of the €73.780,00 customers paid was VAT, taken out of what you kept after the €5.950,00 of refunds. Leave it in, as calculators built for US sales tax do, and the same month reads €18.115,00 instead of €7.285,00. The payment fees of €1.575,00 were charged on the full amount paid, which is how a gateway charges them.
You keep €9,87 of every €100 customers paid, VAT and shipping included: €10,41 kept on an average order.
Run this on my real orders
An estimate from flat rates. In nouz every order is priced from the costs of its own day.
What this calculator does
What it does
A Shopify profit calculator starts from what customers paid and works down to what the month left you. This one takes refunds out, then the VAT inside what you kept, then the goods, shipping and packing, payment fees, ad spend and overhead, and shows every step as a line of a real P&L, ending in EBITDA.
The method
Start from what customers paid, not from a revenue figure.
A Shopify store’s takings are not its revenue. What customers paid holds three things that were never margin: the refunds still to go back, the VAT collected for the tax office, and the shipping the store charged on behalf of a carrier it still has to pay.
So the statement starts where the money starts, with products after discounts plus shipping charged, and takes refunds out on the day they were issued. The VAT comes out of what was kept, never out of what was sold, which is why a refunded order hands its tax back as well as its revenue.
What survives is net revenue, and every cost after it is measured against it: the goods for CM1, shipping, packing and payment fees for CM2, advertising for CM3, overhead for EBITDA. Calculators built for US sales tax skip the VAT step, because in the US it was never in the price. In Europe it always is.
This page prices a whole month of a store. To price one product, its margin and markup, use the profit margin calculator instead.
Where it goes wrong
Four ways a Shopify profit figure ends up wrong.
Three of these make the month look better than it was, and one makes it look worse. None of them shows up as an error anywhere.
VAT taken out before the refunds
Taking the tax out of gross sales and subtracting refunds afterwards charges VAT on orders that were handed back. It understates profit and overstates the tax, and it is why a P&L built that way never agrees with the VAT return.
Payment fees worked out on net revenue
A gateway takes its percentage of what it moved, VAT and shipping included, plus a fixed fee per payment. Applying the rate to net revenue understates every fee, and it keeps the fee when the order is refunded.
Shopify's gross profit read as profit
Shopify’s profit reports stop at net sales minus a static cost field, and only for products with a cost entered. Shipping labels, payment fees, advertising and overhead all sit below that line, and they decide whether the month made money.
Worked example
Where €73.780 of takings actually went
The calculator’s starting month: 700 orders, €71.400 of product sales and €2.380 of shipping, all at 19% VAT, with €5.950 refunded in the month.
The goods cost €21.660, a parcel €6,40, the gateways 1,9% plus €0,25 a payment, the ads €15.000 and the fixed costs €7.000.
Customers paid €73.780 and the month kept €7.285, which is €9,87 of every €100 they paid.
Leave the VAT in and the same month claims €18.115 of profit, 2,5 times the real figure. Nothing in that month changed except whose money the tax was counted as.
In the app
nouz works this out from every order, every day.
A calculator works from flat rates you type once. nouz prices every single order from the cost rules that were in force on that order's own date, and rebuilds the same statement every night from your own orders and your own ad spend.
- Every cost at the rate of its own day. Product costs, parcels and payment fees per order, so a price change never rewrites last month.
- Ad spend comes in by itself. Meta, Google and TikTok through their official APIs, plus anything you add by hand or by CSV.
- The same lines, per product. What is left after product costs, after shipping and payment fees, and after ads, for every product you sell.
How do I calculate profit on Shopify?
Start from what customers paid: products after discounts, plus the shipping they were charged. Take out refunds, then the VAT inside what you kept, by dividing by one plus the rate rather than subtracting the rate. What is left is net revenue. Subtract the cost of the goods, shipping and packing, payment fees, ad spend and overhead, and what survives all of them is the month's profit, EBITDA on a nouz statement.
Why does VAT matter so much?
Because it was never yours. A European store's takings contain the VAT it collects for the tax office, and a calculator built for US sales tax, which sits outside the price, leaves it in. On the figures above that is €10.830 of tax counted as profit: the month would read €18.115 instead of €7.285.
How is this different from a profit margin calculator?
A profit margin calculator prices one product: its price, its cost and the share left. This one prices a whole month of a store, every order and every cost the month carried, including the ones no single product owns, like advertising and rent. Use the profit margin calculator to set a price, and this one to see what the prices added up to.
Do refunds come off before or after VAT?
Before. A refund hands the customer their VAT back too, so the tax you owe is the VAT inside what you kept, not inside what you sold. Taking the VAT out of gross sales and subtracting refunds separately overstates the tax on every refunded order, which is why a P&L built that way never agrees with the VAT return.
Are payment fees charged with or without VAT?
With. A gateway takes its percentage of the whole amount it moved, VAT and shipping included, plus a fixed fee per payment, and it keeps that fee when you refund. In nouz a Shopify Payments payment carries the fee Shopify itself reports, and every other gateway is priced by the rule you set for it.
Does Shopify show this number?
Not as a P&L. Shopify's profit reports stop at net sales minus a static cost field, and only for products that have a cost entered; sales of uncosted products are left out. Shipping labels, payment fees, advertising and overhead sit below that gross profit, and that is the part a store's real profit depends on.
More calculators
Four that go with this one.
Each one is a different question about the same statement. All 32 are free, and none of them asks you to sign up.
All calculatorsProfit margin calculator
Margin, markup and what one unit really contributes, with VAT handled the European way.L16Net AOVL19CM1L25CM2+3Contribution margin calculator
Three margins instead of one, because the goods, the order and the customer are three different questions.L25CM2L29CM3L33EBITDA+7Payment fee calculator
What every gateway takes in a month, blended into the one rate that reaches your P&L.L23Payment feesL25CM2+1Profit forecast calculator
This month's statement carried twelve months forward, orders and ad spend each growing at their own rate.L25CM2L29CM3L33EBITDA+7
The terms this calculator uses
- Gross revenueWhat was actually charged, before returns and before tax.
- Returns and refundsMoney handed back, on the day it was handed back.
- VAT on a P<he tax inside what you kept, which was never revenue.
- Net revenueWhat you kept after discounts, returns and VAT.
- CM1Net revenue minus the cost of the goods you sold.
- CM2CM1 minus the cost of fulfilling the order and getting paid.
- CM3CM2 minus advertising. The number an operator lives on.
- EBITDAProfit before interest, tax, depreciation and amortisation.
- EBITEarnings before interest and tax: EBITDA after depreciation and amortisation.
The long version
Want the long version rather than the arithmetic?
Of a €49 price€15,35remains after VAT, goods, parcel, fee13 min readHow to calculate your Shopify store's true profit, step by stepStrip the VAT, price the goods, subtract parcel, fees and ad spend, then spread the fixed block: the full method for computing what your Shopify store actually keeps.How to calculate your true profitThe same statement, every day, from your real orders.
nouz builds this P&L for your store from Shopify itself: every order, refund and payment, your own cost rules and your ad spend, priced every night down to EBITDA, so nobody types a month in again.
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