VAT Calculator

Value added tax is quoted as a percentage of the net price but experienced as a share of the gross one, and those are different numbers. Getting comfortable with that distinction removes most VAT confusion.

Forward and backward

Take a net price of 250 at a 20% rate. Adding VAT gives 50 of tax and a gross price of 300. Going the other way — an inclusive price of 300 with the same rate — returns a net price of 250 and VAT of 50. The two directions are inverses, which is a useful way to check your own work.

Add:    gross = net × (1 + rate ÷ 100)
Remove: net   = gross ÷ (1 + rate ÷ 100)

Use the action selector to choose which one you want. Removing VAT is the operation most people need most often, because retail prices in VAT jurisdictions are advertised inclusive.

The percentage that is not the rate

That 50 of VAT is 20% of the net price and 16.7% of the gross. At a 20% rate the VAT fraction of an inclusive price is exactly one sixth, which is why bookkeepers reach for "divide by six" on a gross figure. The result panel states this share so the difference stays in front of you rather than being something you have to remember.

The same trap catches people going forward: taking 20% off a VAT-inclusive price does not remove the VAT. It removes rather less, and leaves you understating your net revenue.

Fractional rates and rounding

Rates are not always round. At 8.25%, an inclusive price of 250 breaks into a net of 230.95 and VAT of 19.05. Both figures carry their pence, which they must — a calculator that rounds each money figure to whole units will report the wrong tax on almost every fractional rate, and the error compounds across a ledger. Every money output here keeps two decimal places.

One rate at a time

The tool applies a single rate to the whole amount. VAT systems rarely oblige:

• Reduced rates apply to defined categories such as domestic fuel, children's clothing or certain foods, depending on the jurisdiction.
• Zero-rated supplies carry no VAT but still count as taxable supplies, which is not the same as exempt.
• Exempt supplies sit outside the system and can restrict what input tax you may recover.

A mixed basket has to be broken into rate groups and calculated group by group. Running the basket total through one rate will not reconcile to a compliant invoice.

Who actually bears it

A VAT-registered business charges output tax on sales and recovers input tax on purchases, so the tax is a flow-through rather than a cost. It becomes a real cost only at the end of the chain, where the consumer cannot reclaim it. If you are pricing business-to-business, the net figure is the one that matters to your customer; if you are pricing to consumers, the gross figure is the one they compare.

Not covered here: reverse charge on cross-border services, margin schemes for second-hand goods, flat rate schemes, and any registration threshold. Those change the amount payable substantially and none of them are a simple percentage.

Adjacent tax and pricing tools

For Indian GST with its slab structure and CGST/SGST split, use the GST calculator. For US sales tax, which is added at the register rather than built into the shelf price, use the sales tax calculator. To take a promotional reduction off before tax, use the discount calculator.