VAT Calculator (add or remove sales tax)

Adding and removing VAT

VAT (value-added tax) and sales taxes are charged as a percentage on top of a price. The net price is before tax, the grossis what the customer pays, and the difference is the VAT itself. Which way you calculate depends on which figure you start from.

Add VAT: gross = net × (1 + rate/100)

Remove VAT: net = gross / (1 + rate/100)

Removing VAT is the part people get wrong most often — you can't just subtract the percentage. At 20%, the VAT is one-sixth of the gross, not one-fifth, because the percentage was added to the smaller net figure. Dividing by 1.20 gets it right.

Worked example

Adding 20% VAT to a £100 net price gives £20 of VAT and a £120 gross. Working backwards from that £120 gross: net = 120 / 1.20 = £100, so the VAT was £20 — note that 20% of the gross would have been £24, which is why you divide rather than subtract.

A note on rates

VAT and sales-tax rates vary by country and by product — 20% is common in the UK and much of Europe, but reduced and zero rates apply to some goods. Enter whatever rate applies to your case; the maths is the same.

Rounding rules are set by the tax authority

The arithmetic here is exact, but real invoices follow rounding rules that differ by jurisdiction — some round per line, some per invoice, some to the nearest cent and some down. A total computed here can therefore differ from an official document by a small amount and neither is wrong. Rates also vary by product category within the same country, and reduced or zero rates apply to particular goods, so use the rate that applies to the item rather than the headline national one.