VAT Calculator

VAT basics

Value-added tax (VAT) is a consumption tax charged as a percentage of the price of goods and services. It is used in the European Union, the United Kingdom and many countries elsewhere, where it is sometimes called goods and services tax (GST). The United States has no national VAT and relies on sales tax collected at the final sale.

Tax is collected in steps. A business charges VAT on what it sells (output VAT) and can usually reclaim the VAT it paid on its own purchases (input VAT), so only the value added at each stage is taxed in the end. The consumer, who cannot reclaim it, bears the full amount.

Two prices are in everyday use. The net (VAT-exclusive) price is what the seller receives before tax. The gross (VAT-inclusive) price is what the buyer pays. This calculator converts between them.

VAT rules, rates and exemptions differ by country and by product. Results here are arithmetic estimates, not tax advice. See the disclaimer.

VAT calculation formulas

With the VAT rate written as a percentage, the three relationships you need are:

gross price = net price × (1 + rate ÷ 100)Use this to add VAT.

net price = gross price ÷ (1 + rate ÷ 100)Use this to remove VAT.

VAT amount = gross price − net price

The calculator rounds results to two decimals. A whole-number result is shown without decimals, so 120.00 appears as 120.

Worked examples

Adding VAT. A supplier invoices a net price of 250 with 19% VAT. The gross price is 250 × 1.19 = 297.50, and the VAT amount is 297.50 − 250 = 47.50.

Removing VAT. A shelf price of 360 includes 22% VAT. The net price is 360 ÷ 1.22 = 295.08, so the VAT portion is 360 − 295.08 = 64.92.

A reduced rate. Goods with a net price of 80 taxed at a 9% reduced rate cost 80 × 1.09 = 87.20, of which 7.20 is VAT.

Several items. Three items at a net 49.90 each come to 149.70. At 21% VAT the gross total is 149.70 × 1.21 = 181.14, and the VAT is 31.44. Apply VAT to the invoice total rather than rounding every line, unless your accounting rules require line-by-line rounding.

The most common mistake: subtracting the percentage

To remove VAT from a gross price, it is tempting to take the rate off directly. With a gross price of 120 and 20% VAT, taking 20% off gives 96, but the correct net price is 120 ÷ 1.20 = 100. The VAT was calculated on the net price, not on the gross one, so the tax is a smaller share of the gross price than the headline rate.

The share of a gross price that is VAT equals rate ÷ (100 + rate). For 20% that is 20 ÷ 120 = 16.67%, for 5% it is 5 ÷ 105 = 4.76%, and for 25% it is exactly 20%. For other percentage tasks, such as discounts and markups, see the percentage calculator, the discount calculator and the markup calculator.

Standard VAT rates in Europe

Each country sets its own standard rate, and most also have one or more reduced rates for items such as food, books or public transport. A few standard rates for reference:

Is a price tax-inclusive?

Whether a quoted price already contains VAT depends on who is quoting. Shops selling to consumers in the EU and the UK must normally display VAT-inclusive prices. Business-to-business quotes, invoices and trade catalogues often show net prices, sometimes marked "ex VAT" or "+ VAT". If a price is not labelled, check the invoice or the terms before assuming either.

Use Price with VAT when you start from a net amount and need the amount to charge. Use Price without VAT when you hold a receipt or shelf price and need the net figure, for example to record a purchase or to work out how much tax a reclaim covers.