What qist markup actually is
In a furniture shop in Peshawar’s Karkhano Market, a sofa set carries two prices. Cash: Rs96,000. On twelve monthly installments: Rs120,000. No customer argues about the difference — everyone understands it. That Rs24,000 gap is the qist markup, and this guide walks through qist markup calculation step by step, with real rupees and every step shown.
Markup is not greed. It is the price of three things every installment seller pays. First, time: your Rs96,000 stays locked with the customer for a full year instead of sitting in your shop. Second, risk: some customers will never finish paying, and the markup earned from the honest ones has to cover the losses from the rest. Third, effort: reminders, phone calls, recovery visits — collecting installments is real work, and work has a cost.
A shop that ignores any of these three slowly goes backwards: it feels busy, sells a lot, and wonders where the profit went. Getting the markup math right is what separates a qist business that grows from one that quietly bleeds.
the markup range most Pakistani shops charge on installments — enough to cover risk, time, and recovery effort.
profit on a Rs50,000 item sold at 20% markup — earned over 10 months, not on day one.
The qist markup calculation formula
Forget complicated finance. Every shop in Pakistan uses the same three steps:
Step 1 — Find the markup amount
Multiply the cash price by your markup percentage. Cash price Rs50,000 × 20% = Rs10,000 markup.
Step 2 — Find the total installment price
Add the markup to the cash price. Rs50,000 + Rs10,000 = Rs60,000 total.
Step 3 — Find the monthly qist
Divide the total by the number of months. Rs60,000 ÷ 10 months = Rs6,000 per month.
That is the whole formula. Everything else — down payments, late fees, different item prices — is just these three steps with one small adjustment.
Three worked examples (every step shown)
Now let’s apply the qist markup calculation to three real sales — a mobile phone, a sofa set, and a TV.
Example 1 — Mobile phone: Rs30,000, 15% markup, 6 months
Step 1: markup = Rs30,000 × 15% = Rs4,500.
Step 2: total = Rs30,000 + Rs4,500 = Rs34,500.
Step 3: monthly qist = Rs34,500 ÷ 6 = Rs5,750 per month.
The shop earns Rs4,500 over six months — about Rs750 a month for the waiting, the risk, and the reminding.
Example 2 — Sofa set: Rs96,000, 25% markup, 12 months, Rs12,000 down payment
Step 1: markup = Rs96,000 × 25% = Rs24,000.
Step 2: total = Rs96,000 + Rs24,000 = Rs120,000.
Step 3: subtract the down payment: Rs120,000 − Rs12,000 = Rs108,000 still to collect.
Step 4: monthly qist = Rs108,000 ÷ 12 = Rs9,000 per month.
Notice the order: markup is calculated on the full cash price first, and the down payment is subtracted after. That is how most Pakistani shops do it.
Example 3 — LED TV: Rs50,000, 20% markup, 10 months, no down payment
Step 1: markup = Rs50,000 × 20% = Rs10,000.
Step 2: total = Rs50,000 + Rs10,000 = Rs60,000.
Step 3: monthly qist = Rs60,000 ÷ 10 = Rs6,000 per month.
Simple, clean numbers the customer can verify on the spot — which is exactly why flat markup is trusted in bazaars.
Down payments and the qist markup calculation
A down payment is the chunk the customer pays on day one. It does three good things: it lowers the amount you finance, it lowers every monthly qist, and it proves the customer is serious — a customer who puts Rs12,000 down on day one rarely disappears in month three.
One rule to remember: calculate the markup on the full cash price first, then subtract the down payment. In Example 2 above, the 25% markup was charged on the full Rs96,000 — not on Rs84,000. Most Pakistani shops follow this practice. Whatever you choose, be consistent with every customer, because the day two customers compare notes is the day inconsistency becomes a fight.
Flat markup vs reducing balance
There are two ways to charge markup. Almost every shop in Pakistan uses the first one; banks use the second. Here is the difference in plain words.
| How it works | Flat markup (most shops) | Reducing balance (banks) |
|---|---|---|
| Markup charged on | The full cash price, once | The remaining balance, every month |
| Rs50,000 at 20% over 10 months — total markup | Rs10,000 | About Rs5,500 |
| Monthly qist | Rs6,000 | About Rs5,550 |
| Easy to explain to a customer? | Yes — one simple number | Harder — needs a full schedule |
| Who uses it | Pakistani shops and dealers | Banks and formal lenders |
Running a shop like this? See the system free on WhatsApp →
For a neighborhood shop, flat markup wins: one number, easy to explain, easy to write on a receipt. Reducing balance is fairer to the customer but needs a proper month-by-month schedule — which is exactly the kind of thing software handles without breaking a sweat.
Common qist markup calculation mistakes
The math is simple. The mistakes are expensive. These five quietly eat shop profits across Pakistan:
1. Setting markup too low to cover defaults
If one in ten customers never finishes paying, you lose 10% of your financed amount to defaults. A 10% markup then leaves you with zero — before counting your time and effort. Your markup must be bigger than your default rate, with room to spare.
2. Ignoring how long the money is locked
20% markup over 6 months and 20% over 12 months look the same on paper. They are not: in the second case your money works a full year for the same profit. Longer plans deserve higher markup.
3. No policy for late payments
A 10-month plan where customers pay late becomes a 14-month plan — same markup, four extra months of waiting and chasing. Decide your late-payment rule before the first sale, not after the fifth delay.
4. Doing the math in your head
Rs91,250 ÷ 12 is not a number to guess. One wrong entry in the register and the whole schedule is fiction — and the customer will always remember the lower number.
5. Calculating correctly, then never following up
The finest markup math means nothing if installments aren’t collected on time. That’s where installment management software earns its keep: every due date tracked, reminders sent before each qist, and defaulters listed in one place. Our guide to qist software for shops in Pakistan shows how that tracking looks on a real shop counter.
See it in action
Watch a one-minute walkthrough of the Rahnivo retail system — installment schedules, monthly qist amounts, and reminders, all calculated automatically.
Want the full tour? Explore the retail system.
Frequently asked questions
What is qist markup, in simple words?+
Qist markup is the extra amount added to an item's cash price when it is sold on installments. If a Rs50,000 TV sells for Rs60,000 on ten monthly qists, the Rs10,000 difference is the markup. It compensates the seller for waiting months for full payment, the risk that some customers won't pay, and the effort of collecting every installment.
What markup percentage do shops in Pakistan usually charge?+
Most shops charge between 15% and 30%, depending on the item's price, the plan length, and how risky the customer is. Shorter plans and trusted customers get lower markup; longer plans and new customers get higher markup. Whatever you choose, apply it consistently — different rates for different customers without a clear policy leads to arguments.
Is qist markup the same as interest (sood)?+
Many shop owners treat qist markup as profit on a deferred-payment sale, which religious scholars generally distinguish from interest charged on a cash loan. This article only covers the mathematics. If the religious aspect matters to you or your customers, please ask a trusted scholar for guidance.
How do I calculate the monthly qist when there is a down payment?+
Three steps: first calculate the markup on the full cash price, then add it to get the total price, then subtract the down payment, and finally divide by the number of months. Example: Rs96,000 at 25% markup = Rs120,000 total; minus Rs12,000 down payment = Rs108,000; divided by 12 months = Rs9,000 per month.
Should the markup be higher for longer installment plans?+
Yes. Your money stays locked with the customer for longer, and the chance of late payments grows with time. A common practice is 15–20% for 6-month plans and 20–30% for 12-month plans. The key rule: your markup should always be bigger than your expected default rate, with margin left over.
Can software handle qist markup calculations automatically?+
Yes. In the Rahnivo retail system, you enter the cash price, markup, down payment, and months once — the system builds the full installment schedule, calculates every monthly qist, sends WhatsApp reminders before due dates, and lists anyone who falls behind. No manual math, no register errors.