VAT / Sales Tax Calculator
Calculate VAT or sales tax amounts for prices with or without tax.
Common tax rates:
This VAT calculator adds tax to a net price or strips it out of a gross price, in both directions, for any rate. Switch the mode to tell it whether the number you have already includes tax.
Adding VAT is easy — multiply by 1 + rate. Removing it is where people go wrong: a 20% VAT included in a $120 price is $20, not $24, because the tax was calculated on the $100 net. Below: both formulas, the VAT-vs-sales-tax difference, and the reverse calculation done properly.
How to calculate VAT
- Net to gross: gross = net × (1 + rate/100). $100 at 20% becomes $120.
- The VAT amount is the difference: $20.
- Gross to net: net = gross / (1 + rate/100). $120 at 20% gives 120 / 1.2 = $100.
- The VAT included is gross − net = $20, which is 16.7% of the gross figure, not 20%.
Example
A invoice line of $100 net at 20% VAT becomes $120 gross, with $20 of VAT. Working backwards from a $120 receipt: net is 120 / 1.2 = $100 and the VAT is $20. Multiplying $120 by 0.8 instead gives $96, which understates the net by $4 and overstates the tax by the same amount.
VAT formula
Gross = net × (1 + r/100). Net = gross / (1 + r/100). VAT = gross − net = gross × r/(100 + r).
How to use this calculator
- Choose the mode: price excludes tax, or price includes tax.
- Enter the amount and the rate. Rates with decimals are accepted — 7.5% works.
- Read the net, the tax, and the gross together; the calculator always fills all three.
- Switch the mode rather than retyping to check a figure both ways.
VAT vs. sales tax
VAT is collected at every stage of production, with each business claiming back the tax it paid on inputs; sales tax is collected once, at the final retail sale. The consumer pays a similar amount either way — the difference is in how many times the tax authority touches the money, and in what businesses must report.
Rates vary, and they change
Standard VAT rates run from about 15% to 27% across Europe, with reduced rates for food, books, and children's clothing. Canada's GST is 5%, Australia's GST 10%, and many US states charge no VAT at all but apply sales tax at the county level. Always confirm the current rate for the jurisdiction and product category — rates and exemptions change with budgets.
Inclusive pricing
In the EU and UK, consumer prices must be shown inclusive of VAT, so the shelf price is the gross figure and the tax is buried inside it. That is why the reverse calculation matters more in Europe than in the US, where tax is added at the register and the shelf price is the net.
What this calculator leaves out
Exempt and zero-rated goods, intra-community supply, reverse-charge rules, and partial exemption. If you are filing a return rather than checking a price, use your accounting system's treatment — the arithmetic here is correct, but the classification is not.
Common mistakes
- Removing VAT by multiplying by (1 − rate). The tax was charged on the net, so you must divide by (1 + rate).
- Reporting the tax as a share of gross. A 20% VAT is 16.7% of the gross price.
- Using one country's rate for another. A 20% assumption is wrong for Germany (19%), France (20%), Australia (10%), and Canada (5%).
FAQ
How do I add VAT to a price?
Multiply by 1 + rate/100. $100 at 20% is $120, with $20 of VAT.
How do I remove VAT from a gross price?
Divide by 1 + rate/100. $120 at 20% is $100 net; the VAT is the $20 difference. Do not multiply by 0.8 — that gives $96.
What is the difference between VAT and sales tax?
VAT is charged at each stage of the supply chain with input credits; sales tax is charged once at retail. The end consumer pays roughly the same either way.
Is VAT included in the displayed price?
In the EU and UK, yes for consumers. In the US, sales tax is added at checkout, so the shelf price is net.
What is a VAT number?
A registration identifier that lets a business trade cross-border without being charged VAT by other registered businesses. Validate it before zero-rating an invoice.
How much is 20% VAT on $100?
$20 on a net price of $100, making $120 gross. On a gross price of $100, the VAT is $16.67 and the net is $83.33.
Are all goods charged the same VAT rate?
No. Most jurisdictions apply reduced or zero rates to food, books, medicine, and children's clothing. The rate depends on the product, not just the country.