Finance & Loan
VAT Calculator
Add VAT to a net price, or strip it back out of a gross one — the direction most people get wrong.
VAT Calculator
About the VAT Calculator
Add VAT to a net price, or strip it back out of a gross one. The second direction is where nearly everyone goes wrong: removing 20% VAT is not the same as taking 20% off the price, and the difference is real money.
Enter an amount, choose add or remove, and set your rate. The tool returns the net amount, the VAT, and the gross — all three, always, so you can check the one you need against the one you were given.
It works at any rate you enter, so it handles reduced and zero rates as well as standard ones, and it applies equally to GST, IVA, sales tax or any other percentage tax that works the same way.
How to use the VAT Calculator
- Choose whether you want to add VAT or remove it.
- Enter the amount. The label changes to tell you whether it expects a net or gross figure.
- Enter the VAT rate, or pick one from the common rates list.
- Select Calculate VAT to see net, VAT and gross broken out separately.
- To check the result, add VAT back to the net figure — it should return your original gross.
The two directions
Adding VAT : VAT = net × rate gross = net + VAT
Removing VAT: net = gross ÷ (1 + rate) VAT = gross − net
Rate as a decimal — 20% is 0.20, so dividing by 1.20 removes it.
Worked example
A gross price of £120 including 20% VAT. What is the net?
Net: 120 ÷ 1.20 = £100
VAT: 120 − 100 = £20
£100 net + £20 VAT = £120 gross
Now do it the wrong way: 20% off £120 is £96, leaving £24 of "VAT". Both figures are wrong, and on a £120 invoice you have misstated the tax by £4.
Why subtracting 20% does not remove 20% VAT
Because the two percentages are taken from different bases. VAT is added to the net, so it is 20% of the smaller number. Subtracting 20% from the gross takes it from the larger one.
| Rate | Divide gross by | Equivalent discount on gross |
|---|---|---|
| 5% | 1.05 | 4.76% |
| 7.5% | 1.075 | 6.98% |
| 10% | 1.10 | 9.09% |
| 15% | 1.15 | 13.04% |
| 18% | 1.18 | 15.25% |
| 20% | 1.20 | 16.67% |
| 21% | 1.21 | 17.36% |
| 25% | 1.25 | 20.00% |
The old UK shortcut for 20% VAT was to divide the gross by 6 to get the VAT — which works because 1÷6 is 16.67%, exactly the figure in the last column. It is a neat check, but only for a 20% rate.
Net, gross and VAT
- Net — the price before VAT. Also written as "excluding VAT" or "ex VAT". This is what business-to-business quotes usually show.
- VAT — the tax itself.
- Gross — net plus VAT. Also "including VAT" or "inc VAT". Consumer prices are normally quoted this way.
The distinction matters commercially. A quote of "£1,000 plus VAT" means £1,200 to pay at 20%. A quote of "£1,000 including VAT" means £833.33 reaches the supplier. Same headline number, £200 apart.
Common VAT and sales tax rates
| Country | Standard rate | Reduced rates |
|---|---|---|
| United Kingdom | 20% | 5%, 0% |
| Ireland | 23% | 13.5%, 9%, 0% |
| Germany | 19% | 7% |
| France | 20% | 10%, 5.5%, 2.1% |
| Spain | 21% | 10%, 4% |
| Netherlands | 21% | 9% |
| Australia (GST) | 10% | 0% |
| India (GST) | 18% | 40%, 5%, 0% |
| UAE | 5% | 0% |
Rates change, and which goods fall into which band changes more often still. Check your own tax authority's current guidance before relying on a rate for anything official — this table is a starting point, not a compliance reference.
GST, IVA and sales tax
The arithmetic is identical for any tax charged as a percentage of price. GST in Australia, India, Canada and New Zealand, IVA across Latin America and southern Europe, and consumption taxes elsewhere all work the same way, so this calculator handles them — just enter the right rate.
US sales tax is the one genuine exception. It is normally excluded from displayed prices and added at the till, rather than embedded in them. It also varies by state, county and city, so a single national rate does not exist. Use the "add" direction with your local combined rate, and be aware that shelf prices in the US are usually already net.
Where VAT arithmetic goes wrong
- Subtracting instead of dividing when removing VAT — the error this page opens with.
- Assuming a quote is gross. "Plus VAT" and "including VAT" are £200 apart on a £1,000 job.
- Applying the standard rate to everything. Many goods sit at reduced or zero rates.
- Rounding each line separately on a multi-line invoice, which can leave the total a penny or two out.
For general percentage work, including reverse calculations on discounts, use the percentage calculator.
This is a calculation aid, not financial advice. It does not know your circumstances, and nothing here is a quote, an offer or a recommendation. Rates, fees, tax rules and regulations change constantly and differ by country and provider. Where the amounts matter to you, take advice from a qualified professional who knows your situation.
VAT formula: add or remove VAT
Four short formulas cover every VAT sum. Rate is the VAT rate as a percentage.
Add VAT: Gross = Net × (1 + rate ÷ 100)
Remove VAT: Net = Gross ÷ (1 + rate ÷ 100)
VAT in a net price: VAT = Net × rate ÷ 100
VAT in a gross price: VAT = Gross − Net
"Net of VAT" simply means the price before VAT. "Gross" or "VAT inclusive" means after. So the inclusive VAT formula is the remove-VAT line: divide the amount with VAT by 1 plus the rate. That is all a VAT removal calculator does.
VAT calculator UK: 20% quick table
At the UK standard rate, VAT is exactly one sixth of a VAT-inclusive price. So to find the VAT in a gross price, divide by 6. To find the net, divide by 1.2.
| Net (ex VAT) | VAT at 20% | Gross (inc VAT) |
|---|---|---|
| £10.00 | £2.00 | £12.00 |
| £50.00 | £10.00 | £60.00 |
| £100.00 | £20.00 | £120.00 |
| £250.00 | £50.00 | £300.00 |
| £1,000.00 | £200.00 | £1,200.00 |
At the 5% reduced rate, the VAT is one twenty-first of the gross price. Domestic energy and children's car seats are two common examples of goods charged at 5%.
VAT rates in Ireland, South Africa and elsewhere
The same calculator works for any country — type the rate and choose add or remove. A few standard rates people often ask about:
- Ireland — 23% standard rate. To remove it, divide the gross price by 1.23.
- South Africa — 15%. Divide by 1.15 to find the price before VAT.
- UAE and Saudi Arabia — 5% and 15%.
- Mexico and Spain (IVA) — 16% and 21%.
Rates change, so check the tax authority’s current figure before you file anything.
Related guides
Other ways to use this calculator
- Reverse VAT calculator — choose remove VAT to work back from a gross price.
- Net to gross calculator — choose add VAT.
- Sales tax calculator — the same maths works for US sales tax at your local rate.
Frequently asked questions
Divide the gross price by 1 plus the rate — for 20% VAT, divide by 1.20. A £120 gross price gives £100 net and £20 VAT. Do not subtract 20%, which would give £96 and overstate the VAT by £4. The same rule applies at any rate: divide by 1.05 for 5%, by 1.21 for 21%, and so on.
Because the two percentages come from different bases. VAT is 20% of the net price, so it is calculated on the smaller figure. Subtracting 20% from the gross takes it from the larger one. Removing 20% VAT is actually equivalent to a 16.67% discount on the gross — which is why the old shortcut of dividing a gross price by 6 gives the VAT.
Net is the price before VAT, also written "excluding VAT" or "ex VAT". Gross is net plus VAT, also "including VAT". Business-to-business quotes usually show net; consumer prices usually show gross. The distinction is commercially significant: £1,000 plus VAT means £1,200 to pay, while £1,000 including VAT means the supplier receives £833.33.
Yes for GST and IVA — Australia, India, Canada, New Zealand and most of Latin America all charge a percentage of price, so the arithmetic is identical; just enter the right rate. US sales tax is the exception: it is added at the till rather than embedded in the displayed price, and varies by state, county and city, so use the "add" direction with your local combined rate.
Divide the gross price by 1 plus the VAT rate as a decimal. At 20% VAT, divide by 1.2: £120 ÷ 1.2 = £100 net, so the VAT was £20. Do not simply take 20% off the gross price.
Multiply the net price by 1 plus the VAT rate. At 20%, £250 becomes 250 times 1.2, which is £300. The VAT itself is £50.
Sources and further reading
- HMRC — VAT rates on different goods and services — current UK standard, reduced and zero rates
- European Commission — VAT rates applied in EU member states — the EU rate table this page summarises
- Australian Taxation Office — GST — how GST differs in presentation from VAT
- Goods and Services Tax Council, India — GST rates — Indian GST slabs
- GOV.UK — VAT rates on different goods and services — official UK standard, reduced and zero rates