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This VAT calculator works in two directions. In Add VAT mode, enter the net price (before tax): the calculator multiplies it by the VAT rate to get the VAT amount, then adds it to the net price for the gross total. In Remove VAT mode, enter the gross price (already including tax): the calculator divides by 1 plus the rate to recover the net price, then subtracts to isolate the VAT amount. All money figures are rounded to two decimals. These results are estimates for planning and invoice checks, not professional financial advice; confirm the correct rate and tax treatment with your tax authority.
Value Added Tax (VAT) is a consumption tax charged on most goods and services in more than 170 countries. It is collected at every stage of the supply chain, from raw material to manufacturer to retailer, with each business charging VAT on its sales (output VAT) and reclaiming the VAT it paid on its purchases (input VAT). The difference is remitted to the tax authority, so the full tax burden ultimately falls on the end consumer. In some countries the same system goes by other names: GST in Australia, Canada, India and Singapore, consumption tax in Japan, and VAT equivalents elsewhere.
Two directions, two formulas, and the second is the inverse of the first. To add VAT to a net price: VAT amount = net price × rate / 100, and gross price = net price + VAT amount, which is the same as net price × (1 + rate / 100). To remove VAT from a gross price (reverse VAT): net price = gross price / (1 + rate / 100), and VAT amount = gross price - net price. A handy shortcut to extract just the VAT portion from a VAT-inclusive total: VAT amount = gross × rate / (100 + rate). For example, 120 including 20% VAT gives 120 × 20 / 120 = 20 of VAT.
First select your currency. Enter the amount you are starting with: a net price (the VAT-exclusive amount before tax) if you want to add VAT, or a gross price (the VAT-inclusive total) if you want to remove it. Set the VAT rate as a percentage, using the default 20 or a custom rate for your country or product. Choose Add VAT or Remove VAT as the calculation mode. The net amount, VAT amount, and gross amount update instantly with the formula shown beside the result so you can verify the arithmetic.
VAT and sales tax are both consumption taxes, but they work very differently. VAT is collected at each stage of production with businesses reclaiming the VAT on their purchases, which creates a paper trail that makes evasion harder; it is used in 170+ countries. Sales tax is collected only once, at the final sale to the consumer, with no reclaim mechanism for businesses; it is primarily used in the United States. For shoppers the practical difference shows on the price tag: in the UK and EU the displayed price usually includes VAT, while in the US the sales tax is added at checkout on top of the shelf price. If you need the add direction for a US-style sales tax, use this calculator with your combined state and local rate.
Standard VAT rates differ widely: the UK charges 20%, Germany 19%, France 20%, Italy 22%, Spain 21%, and the Netherlands 21%, while the UAE charges 5%, India applies GST slabs with 18% the most common, and Australia applies a flat 10% GST. Hungary has the highest standard rate in the world at 27%, followed by Finland at 25.5% and Denmark, Sweden, and Norway at 25%. Most countries also run reduced rates for essentials such as food, books, children's clothing, and medicine, plus zero-rated supplies (0% charged but input VAT still reclaimable) and exempt supplies (no VAT and no input reclaim), so always confirm which rate applies to your product with your tax authority.
Adding: a net invoice of 250 at 20% VAT gives VAT = 250 × 0.20 = 50 and a gross total of 300. Removing: a gross price of 300 including 20% VAT gives net = 300 / 1.20 = 250 and VAT = 300 - 250 = 50. The mistake to avoid is simply subtracting the percentage from the gross price: 300 minus 20% is 240, which is wrong. VAT was calculated on the smaller net figure, not on the gross total that already contains it, so 20% VAT is only one sixth of the gross. Always divide by 1 plus the rate (1.20 for 20%, 1.15 for 15%, 1.05 for 5%) when working from a gross price. At 20% there is a quick shortcut: divide the gross total by 6 to get the VAT portion.
Multiply the net price by the VAT rate divided by 100, then add it to the net price. Equivalently, multiply the net price by 1 plus the rate: at 20% VAT, a 100 net price becomes 100 × 1.20 = 120 gross, with 20 of VAT.
Divide the gross price by 1 plus the VAT rate as a decimal. At 20% VAT, divide by 1.20: a 120 gross price gives a 100 net price, and the VAT is 120 - 100 = 20. At 15%, divide by 1.15; at 5%, divide by 1.05.
Subtract the net price from the gross price, or use the shortcut: VAT = gross × rate / (100 + rate). For a 120 total including 20% VAT, that is 120 × 20 / 120 = 20.
VAT is calculated on the net price, not on the VAT-inclusive total. Subtracting 20% from 120 gives 96, but the correct net price is 120 / 1.20 = 100. The 20% was added to the smaller net figure, so it is only one sixth of the gross total. Always divide by 1 plus the rate.
No. VAT is collected at every stage of the supply chain and businesses reclaim the VAT paid on their purchases, while sales tax is collected only once at the final sale to the consumer. VAT is used in 170+ countries including the UK and the EU; sales tax is primarily used in the United States.
It is the turnover level at which registering for VAT becomes compulsory. In the UK the threshold is 90,000 GBP in taxable turnover over any rolling 12-month period (since April 2024). You can usually register voluntarily below the threshold, which lets you reclaim VAT on your business purchases, but confirm the rules with your tax authority.
Zero-rated supplies are charged 0% VAT, but the supplier can still reclaim the input VAT on related purchases. Exempt supplies also carry no VAT, but the supplier cannot reclaim input VAT on them. Financial services, healthcare, and education are exempt in many countries.
Hungary, at 27%. Finland follows at 25.5%, then Denmark, Sweden, and Norway at 25%. The EU requires member states to keep a minimum standard rate of 15%.
Yes, for the add direction. Enter the pre-tax price, type your combined state and local sales tax rate, and choose Add VAT. The arithmetic is identical: price × (1 + rate / 100) gives the total the customer pays.