Index Linked Price Adjustment Calculator

Work out index linked price adjustment instantly with clear inputs, formula shown and shareable results.

About Index Linked Price Adjustment Calculator

Partial pass-through shares input cost risk between buyer and supplier: an 80% factor means the supplier absorbs a fifth of any index movement. That retained exposure is what preserves the supplier's incentive to hedge and to source efficiently.

Formulas

Index movement

Movement % = (Current index / Base index - 1) x 100

Adjusted price

Adjusted = Base price x (1 + Movement x Pass-through %)

Worked example

With the default values below, Index Linked Price Adjustment Calculator returns Adjusted price of $1,598.48. Change any input above and every figure here is recalculated in your browser.

Inputs used

Base price: 1,450
Base index: 100
Current index: 112.8
Share of index movement passed through: 80

Results

Adjusted price: $1,598.48
Index movement: 12.800%
Adjustment applied: 10.240%
Amount absorbed by the supplier: $37.12

Step by step

1Values used
2Index movement
3Adjusted price
4Adjusted price= 1,598.48
5Index movement= 12.800
6Adjustment applied= 10.240
7Amount absorbed by the supplier= 37.12

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

Frequently Asked Questions

Why not pass through 100%?

Because full pass-through removes the supplier's incentive to manage input cost. Retaining 10-25% keeps them engaged in hedging and substitution.

How often should adjustment be applied?

Quarterly is common. Monthly creates administrative noise; annually creates large steps and cash flow strain for the supplier.