VAT Calculator

Adding VAT is straightforward: multiply the net price by the VAT rate as a decimal, then add that VAT back on to reach the gross price the customer pays. Because VAT is a flat percentage, the VAT amount scales directly with the net price.

The reverse — removing VAT from a price that already includes it — is where care is needed. You cannot simply subtract the rate from the gross, because the VAT was charged on the smaller net base, not on the gross. Instead you divide the gross by (1 + rate ÷ 100). At a 20% rate, that means dividing by 1.2; the difference between the gross and that net figure is the VAT element. Businesses do this constantly to separate the recoverable VAT from the net cost on a purchase invoice.

VAT is especially prevalent in the UK and across the European Union, and rates vary widely from one country to the next — and even between standard, reduced, and zero-rated categories within a single country. Because of that variation, the rate is a free input here rather than a fixed assumption. The formula is currency-agnostic; switch the currency at the top of the page to view your numbers in your own.

Start with a 100 net price at a 20% VAT rate. The VAT is 100 × 0.20 = 20, so the gross price including VAT is 120. To reverse it, take that 120 VAT-inclusive price and divide by 1.20 — which returns the original 100 net, leaving 20 as the VAT. Subtracting 20% of 120 instead would give 96, which is wrong, because the VAT was calculated on the 100 net base rather than on the 120 gross.

Many countries apply more than one VAT rate — a standard rate plus reduced or zero rates for essentials like food, books, or children’s goods — so enter the rate that matches the specific item. Some supplies are exempt rather than zero-rated, which affects whether a business can reclaim input VAT, though the price arithmetic is the same. Cross-border and digital sales can shift which country’s rate applies, so confirm the correct rate before relying on the figure.