VAT Calculator
Add VAT to a net price or extract VAT from a gross price, with any tax rate and full breakdown.
VAT Calculator — input your values
What does this financial calculator do?
The VAT calculator handles the two questions everyone with a VAT-registered business faces: adding VAT to a net price for your invoice, or extracting the VAT that is already included in a gross price you paid.
Either way you get the net price, the VAT amount and the gross price, with the arithmetic shown step by step. It works for any rate, from reduced rates like 5% to standard rates around 20%.
Formula and variables
To extract VAT from a gross price: Net = Gross ÷ (1 + rate).
| Symbol | Meaning |
|---|---|
| Net | Price before VAT |
| VAT | Value added tax amount |
| Gross | Net + VAT (the price you pay) |
Worked example
You sell goods for $100 net and must add 20% VAT.
- VAT = $100 × 0.20 = $20.
- Gross = $100 + $20 = $120.
- The customer pays $120; you remit $20 to the tax authority.
Answer: The invoice total is $120, including $20 of VAT.
Tips and common mistakes
Tips
- VAT is collected for the tax authority, not kept — it never appears in profit or loss.
- You can usually reclaim the VAT you pay on business purchases, so track every receipt with VAT shown.
- Different goods attract different rates (reduced and zero rates exist), so check the correct rate per item.
- On invoices, show the net price, the VAT rate, the VAT amount and the gross total separately — most tax regimes require it.
Common mistakes to avoid
- Extracting VAT by subtracting the rate: 20% off $120 gives $96, but the correct net is $100.
- Forgetting to separate VAT collection from business revenue when budgeting cash flow.
- Using the wrong rate for reduced-rated or zero-rated goods and services.
VAT Calculator — frequently asked questions
How do I add VAT to a price?
Multiply the net price by the VAT rate to find the VAT, then add it to the net price. At 20%, $100 net becomes $20 VAT plus $100, a $120 gross price.
How do I remove VAT from a gross price?
Divide the gross price by (1 + rate). A $120 gross price at 20% is $120 ÷ 1.20 = $100 net. Subtracting 20% instead gives $96, which is wrong.
What is the difference between VAT and sales tax?
VAT is charged at every stage of the supply chain with credits for input VAT, while a traditional sales tax is charged only at the final sale. To a consumer they look similar; to businesses the mechanics differ.
Can I reclaim VAT on business purchases?
VAT-registered businesses generally can reclaim the VAT charged on purchases used for taxable business activities — known as input VAT — by reporting it on the VAT return.
What VAT rate should I use?
It depends on the country and the goods or services. Standard rates range from 17% to 27% across the EU, with reduced rates (5% to 10%) for items like food and books, and zero rates in some places.
Is VAT included in the price shown in stores?
In most countries with VAT, displayed prices must include it. In the US, sales tax is added at the register — check the local rules before comparing prices across countries.