VAT / Sales Tax Calculator
Value Added Tax (VAT) and sales tax are consumption taxes applied as a percentage of a product or service's price. This calculator lets you work in either direction: add a tax rate to a net (pre-tax) price to find the gross amount you will pay, or strip the tax out of a gross (tax-inclusive) price to reveal the underlying net cost.
Understanding the difference between adding and removing tax is essential for businesses issuing invoices, consumers comparing prices, and accountants reconciling accounts. The calculations use standard inclusive and exclusive tax formulas, ensuring precision for any tax rate — from the UK's 20% VAT to the US's varied state sales tax rates.
How it works
Add tax: gross = net × (1 + rate/100); tax = gross − net. Remove tax: net = gross ÷ (1 + rate/100); tax = gross − net.
Use cases
- Calculating the final price of goods or services including VAT
- Extracting the pre-tax net price from a VAT-inclusive receipt
- Preparing invoices that must show net, tax, and gross separately
- Comparing prices across countries with different VAT or sales tax rates
- Verifying tax amounts on supplier invoices for bookkeeping and auditing
Frequently asked questions
How do you add VAT to a price?
Multiply the net price by 1 plus the rate as a decimal: gross = net × (1 + rate/100). For example, adding 20% VAT to a net price of 100 gives 100 × 1.20 = 120, so the VAT itself is 20. This calculator does the multiplication for any rate you enter.
How do I remove VAT from a gross price?
Divide the gross (tax-inclusive) price by 1 plus the rate as a decimal: net = gross ÷ (1 + rate/100). For a gross price of 120 at 20% VAT, the net is 120 ÷ 1.20 = 100, leaving 20 as the tax. Simply dividing by the percentage would give the wrong answer.
What is the difference between VAT and sales tax?
VAT is collected at each stage of production and distribution, with businesses reclaiming the tax they paid on inputs, so it is common in Europe and much of the world. Sales tax is charged only once, at the final point of sale to the consumer, as in the United States. Both are consumption taxes and this calculator handles either one using the same math.
How much is 20% VAT on 100?
20% VAT on a net price of 100 is exactly 20, making the gross price 120. If instead 120 already includes 20% VAT, the tax portion is 20 and the net price is 100. The direction of the calculation matters, which is why this tool offers both add and remove modes.
Why can't I just subtract the percentage to remove tax?
Subtracting 20% from a tax-inclusive price gives the wrong result because the percentage was applied to the smaller net amount, not the larger gross amount. Removing 20% from 120 by subtraction gives 96, but the correct net is 100 (120 ÷ 1.20). Always divide by 1 plus the rate to strip tax correctly.