VAT Calculator
Add VAT to a net price, or work out the net price from a VAT-included total.
| Net price | – |
| VAT amount | – |
| Gross price | – |
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VAT math trips people up in a specific, predictable way: removing 20% VAT from a price is not the same as subtracting 20% from it. This calculator does the correct math both directions, and this page explains why the naive approach is wrong.
What VAT actually is
VAT (Value Added Tax) is a consumption tax added at each stage of a product's sale, used across the EU, UK, and many other countries. For a consumer buying something at a shop, what matters practically is simpler: the net price is the amount before tax, and the gross price is what you actually pay, tax included. A price advertised to businesses is often shown net; a price on a shop shelf is almost always shown gross.
The common mistake this avoids
If a €120 gross price includes 20% VAT, the net price is not €120 − 20% (€96). It's €100 — because the 20% was calculated on top of that €100, not on top of €120. The correct formula to remove VAT is net = gross ÷ (1 + rate), not gross × (1 − rate). This calculator's "Remove VAT" mode does the division correctly; "Add VAT" does the simpler forward calculation (net × rate) for when you're starting from a pre-tax price.
Both directions, worked out
Adding VAT: a freelancer's net rate of €250 for a day's work, plus 20% VAT, is 250 × 1.20 = €300 on the invoice, with €50 of that being tax owed. Removing VAT: a receipt shows €300 total including 20% VAT — the net amount is 300 ÷ 1.20 = €250, not €240 (which is what wrongly subtracting 20% from €300 would give you). Same numbers, opposite direction, and the calculator above handles either instantly.
Typical VAT rates
Standard VAT rates vary significantly by country and often have reduced rates for specific categories (food, books, children's items). As a rough reference: the UK standard rate is 20%, France and Germany both use rates around 19–20%, and rates across the EU generally range from about 17% to 27%. Always confirm the current rate for your country and product category, since these change and vary by category.
Why this matters for invoicing
If you're self-employed or run a small business, getting net/gross math wrong on an invoice isn't just an arithmetic slip — it can mean under-charging a client, under-reporting tax owed, or having to issue an awkward corrected invoice after the fact. Most invoicing software calculates this automatically, but it's worth understanding the underlying math (see above) so you can sanity-check the numbers it produces, especially when quoting a client a "round" total that needs to work out to a clean net figure once VAT is removed.
Frequently asked questions
Why is "Remove VAT" not just subtracting the percentage?
Because the tax was calculated on the net price, not the gross price — subtracting it from the gross figure directly gives a wrong (too-low) net amount. Dividing by (1 + rate) is the mathematically correct way to reverse it.
Is VAT the same as US sales tax?
They're similar in effect (both are consumption taxes) but structured differently — sales tax is typically added only at the final point of sale and isn't usually included in a displayed price, while VAT is collected at each stage of production and is usually included in the price shown to consumers.
Can I use this for invoicing my own business?
It's useful for the arithmetic, but confirm your jurisdiction's specific invoicing requirements (what must be shown, rounding rules) with a local accountant or tax authority before relying on it for official documents.
What if my country has multiple VAT rates for different goods?
Just enter the specific rate that applies to your item — many countries do have a reduced rate for essentials like food or books alongside the standard rate for everything else.