VAT Calculator

Value added tax is quoted as a percentage of the net price, but people experience it as a share of the gross price, and those are different numbers. Once you're comfortable with that difference, most VAT confusion goes away.

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, from an inclusive price of 300 at the same rate, returns a net price of 250 and VAT of 50. The two directions are inverses, which gives you an easy 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 one most people need most often, because retail prices in VAT jurisdictions are advertised inclusive.

The percentage that isn't 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 shows this share, so you don't have to keep the difference in your head.

The same trap catches people going forward: taking 20% off a VAT-inclusive price doesn't remove the VAT. It removes less than that, and you end up understating your net revenue.

Fractional rates and rounding

Rates aren't always round. At 8.25%, an inclusive price of 250 breaks into a net of 230.95 and VAT of 19.05. Both figures need their pence. 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. Real VAT systems rarely work that simply:

• 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 isn't 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 split into rate groups and calculated group by group. If you run the basket total through one rate, it won't 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 for the business the tax just flows through. It only becomes a real cost at the end of the chain, where the consumer can't reclaim it. If you're pricing business-to-business, the net figure is the one your customer cares about. If you're 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 is 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 instead of being built into the shelf price, use the sales tax calculator. To take a promotional reduction off before tax, use the discount calculator.