VAT calculator
Add VAT to a price, or take it back out of a VAT-inclusive total, at any rate — with the net, VAT and gross amounts shown separately.
Single-rate VAT. Real schedules have reduced and zero rates for specific categories.
How this calculator works
VAT is a consumption tax added at each stage of a supply chain, with businesses reclaiming the VAT they paid on purchases. For a consumer, though, it behaves like a single tax on the final price. The confusing part is that prices in the EU, UK and many other markets are quoted VAT-inclusive, while business invoices are quoted net.
The two operations are not symmetric. Adding 20% VAT to a €100 net price gives €120 gross. Extracting VAT from a €120 gross price does not mean subtracting 20% — that would give €96. The correct operation is to divide by 1.20, giving €100 net and €20 VAT. Use the mode selector to tell the calculator which direction you want. Standard rates vary widely: 20% in the UK, 19–21% across most of the EU, 25% in Denmark and Sweden, and 5% or 0% for reduced categories such as food and books.
The formula
If the amount is net: VAT = net × rate ÷ 100, gross = net + VAT. If the amount is gross, the net is found by dividing:
net = gross / (1 + rate / 100)
vat = gross − net
gross = net · (1 + rate / 100)The effective VAT fraction of a gross price is rate ÷ (100 + rate) — for 20% that is 1/6, not 1/5.
Worked example
With the default amount entered as VAT-inclusive at 20%, $120.00 breaks down into $100.00 net plus $20.00 of VAT. Switching the mode to net-inclusive would add VAT to the amount instead.
Common mistakes
- Subtracting the rate to remove VAT. Dividing €120 by 1.20 gives €100; subtracting 20% gives €96, which is wrong.
- Using the wrong rate. Reduced and zero-rated categories exist for food, books, children's clothing and more. Check the rate for the actual goods.
- Mixing net and gross when invoicing. Small businesses must show net, VAT and gross clearly on a VAT invoice; mixing them up creates bookkeeping errors.
Frequently asked questions
How do I calculate VAT from a gross amount?
Divide the gross amount by 1 + (VAT rate ÷ 100). At 20%, €120 ÷ 1.20 = €100 net, so the VAT is €20.
What is the difference between VAT and sales tax?
VAT is collected at each stage of the supply chain with credits for tax already paid; sales tax is collected only once, from the final consumer. Both are consumption taxes on the final price.
Which countries use VAT?
Most of Europe, the UK, and many countries in Asia, Africa and South America use VAT. Australia, Canada, India and Singapore use a Goods and Services Tax, which works similarly.
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