VAT Calculator
Add or remove VAT and see net, tax and gross amounts.
Total with VAT
$120.00
$20.00 VAT at 20%
VAT amount
$20.00
Net (ex-VAT)
$100.00
Gross (inc-VAT)
$120.00
AI Breakdown & Smart Takeaway
Plain-English insight on your numbers
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How the VAT Calculator works
The VAT Calculator lets you instantly add VAT to a net price or strip VAT from a gross price, displaying the net amount, tax amount, and gross total side by side — ideal for business owners, accountants, freelancers, and shoppers who need to verify tax figures quickly and accurately.
Value Added Tax (VAT) is a consumption tax levied at each stage of the supply chain, with the final burden falling on the end consumer. Unlike a simple sales tax applied only at the point of sale, VAT is collected incrementally — suppliers, manufacturers, and retailers each charge VAT on their margin and reclaim what they have already paid. This calculator focuses on the two most common real-world tasks: calculating the gross price when you know the net (ex-VAT) amount, and reverse-calculating the net price and tax component when you only have the VAT-inclusive (gross) figure.
When you add VAT to a net price, the formula is straightforward multiplication: gross = net × (1 + rate/100). For example, a £200 net invoice at 20% VAT produces a £40 tax charge and a £240 gross total. The reverse calculation — removing VAT from a gross price — is where many people make a costly mistake. You cannot simply take 20% off the gross; the correct approach is to divide by (1 + rate/100), so a £240 gross ÷ 1.20 returns the £200 net. Using the wrong method overstates the net and understates the recoverable tax.
VAT rates vary significantly by country and even by product category within the same country. The UK standard rate is 20%, with reduced rates of 5% and 0% for essentials like children's clothing and most food. The EU average hovers around 21%, though member states range from 17% (Luxembourg) to 27% (Hungary). Countries like Australia, Canada, New Zealand, and India use equivalent systems called GST (Goods and Services Tax) with their own rates. This calculator accepts any custom rate, so it works for any jurisdiction or product type worldwide.
A common strategic use of this tool is invoice reconciliation: if a supplier sends you a VAT-inclusive total and you need to post the net and tax figures separately in your accounting software, the reverse VAT function eliminates manual arithmetic errors. Businesses that are VAT-registered can reclaim the input tax they pay on purchases, making accurate separation of net and gross amounts critical for cash-flow and compliance. Always confirm the applicable VAT rate for your specific goods or services category before submitting returns, as misclassification is one of the most frequent causes of tax authority queries.
Formula
Add VAT: Gross = Net × (1 + Rate/100); Tax = Gross − Net | Remove VAT: Net = Gross ÷ (1 + Rate/100); Tax = Gross − Net
Pro tips
- Never remove VAT by simply subtracting the rate percentage from the gross — always divide by (1 + rate/100) to get the true net figure.
- If you work across multiple countries or product categories, use the custom rate field each time rather than assuming a standard rate applies everywhere.
- For invoice reconciliation, use the reverse VAT function and cross-check: net + tax should equal the gross figure on the supplier's invoice to the penny.
- VAT-registered businesses should run supplier invoices through the remove-VAT function before booking them, so input tax is recorded separately and available for reclaiming on your next return.
- When quoting prices to consumers (B2C), always state the gross (VAT-inclusive) price; when quoting to other businesses (B2B), clearly state the net price and the VAT rate to avoid disputes.
Key terms
- Net Amount
- — The price of goods or services before any VAT or tax is applied, also called the ex-VAT or ex-tax price.
- Gross Amount
- — The total price inclusive of VAT that a customer actually pays, covering both the net value and the tax charge.
- VAT (Value Added Tax)
- — A consumption tax added to a product's price at each stage of production or distribution, collected by businesses on behalf of the government.
- GST (Goods and Services Tax)
- — A functionally equivalent consumption tax used in countries such as Australia, Canada, India, and New Zealand, calculated using the same add/remove logic as VAT.
- Input Tax
- — The VAT a VAT-registered business pays on its purchases, which it can typically reclaim from the tax authority.
- Tax Rate
- — The percentage applied to the net price to calculate the VAT charge, set by the relevant government and varying by country and product type.
