How to use the VAT calculator
Choose what you have:
- Add VAT — prices before VAT (net), such as a supplier’s quote or your own price list. The result is the amount the customer pays.
- Remove VAT — prices that already include VAT (gross), such as a shop price or a receipt. The result is the net price and the VAT inside it.
Enter one line per item or per group of items, each with its own rate. Many countries have a standard rate and one or more reduced or zero rates for things like food, books or domestic energy, so a single invoice often mixes rates. The result shows the VAT at each rate and the totals.
The quick pick fills in the standard rate for a few countries, checked on 19 September 2026 against the European Commission’s Your Europe table and GOV.UK. It does not know reduced rates or which goods they cover, and rates change, so confirm the rate with the tax authority before relying on it. Anything else, type the rate directly.
VAT formulas
Adding VAT to a net price:
VAT = Net × r Gross = Net + VAT = Net × (1 + r)
Taking VAT out of a gross price:
Net = Gross ÷ (1 + r) VAT = Gross − Net
- Net
- price excluding VAT
- Gross
- price including VAT
- r
- VAT rate as a decimal (20% → 0.20)
The common mistake: Gross × (1 − r)
It is tempting to remove 20% VAT by taking 20% off the gross price. That takes off too much, because the VAT was charged on the smaller net price, not on the gross price. A price of 120.00 including 20% VAT is 120.00 ÷ 1.20 = 100.00 net and 20.00 VAT. Taking 20% off gives 120.00 × 0.80 = 96.00, which is 4.00 too little. Put another way, at 20% the VAT is one sixth of the gross price (0.20 ÷ 1.20), not one fifth.
Rounding. VAT is rarely a whole number of cents or pence, so it is rounded; the calculator rounds half-up (half a cent or more rounds up). With several lines you can round the VAT on each line and add them up, or add the lines at each rate and round once. The two can differ by a cent or two; the main result rounds once per rate and the line-by-line figure is shown when it differs. Which is acceptable on an invoice is set by each country’s rules.
Worked example
An invoice has three net amounts: 249.00 at a 20% standard rate, and 12.50 and 8.30 at a 5% reduced rate.
- VAT at 20%: 249.00 × 0.20 = 49.80
- VAT at 5%: (12.50 + 8.30) × 0.05 = 20.80 × 0.05 = 1.04
- Total VAT: 49.80 + 1.04 = 50.84, so the gross total is 269.80 + 50.84 = 320.64
Rounded line by line instead, the reduced-rate lines give 0.625 → 0.63 and 0.415 → 0.42, which is 1.05 — one cent more, for a gross total of 320.65.
Going the other way, a shop price of 59.99 including 20% VAT is 59.99 ÷ 1.20 = 49.991…, so 49.99 net and 10.00 VAT. Taking 20% off the shelf price would wrongly give 47.99.
VAT versus US sales tax
The arithmetic is the same, but the two taxes work differently. VAT is charged at every stage of production and distribution: each business charges VAT on its sales and deducts the VAT it paid on its purchases, so the tax collected along the chain adds up to the VAT on the final price, and the final consumer bears it. US sales tax is normally charged once, on the sale to the end customer, and added at the register.
- Prices usually include VAT. In the EU, consumers must be told the total price including all taxes, so shop prices are gross. Use Remove VAT to see the tax inside them.
- Business quotes are often net. Between businesses, prices are commonly quoted excluding VAT. Use Add VAT for the amount to pay.
- US tax added at the till. For a US purchase, where state and local rates are added on top of the shelf price, use the sales tax calculator.
- Discounts come off the net price. Take a discount off the net price before adding VAT; for pricing, the margin calculator works on net amounts because VAT is not your income.
What this calculator does not do
- It does not decide which rate applies to a product; that depends on national rules.
- It does not handle exemptions, reverse charge on cross-border business supplies, margin schemes or flat-rate schemes, which change who accounts for the VAT or how it is calculated.
- It works in the currency’s cents; it does not convert between currencies.
Frequently asked questions
How do I remove VAT from a price?
Divide the price including VAT by 1 plus the rate as a decimal. At 20%, divide by 1.20: a price of 120.00 is 100.00 net and 20.00 VAT. Do not take 20% off the price; that gives 96.00, which is too little.
How do I add VAT to a price?
Multiply the net price by the rate as a decimal to get the VAT, then add it to the net price. At 20%, 249.00 net has 49.80 VAT and costs 298.80 including VAT. Multiplying by 1.20 in one step gives the same answer.
What fraction of a VAT-inclusive price is VAT?
It is the rate divided by 1 plus the rate. At 20% that is 0.20 ÷ 1.20, one sixth of the gross price. At 5% it is 0.05 ÷ 1.05, one twenty-first. It is always less than the rate itself.
What VAT rate should I use?
Use the rate that applies to that product in the country where the VAT is due. Most goods take the standard rate, but many countries tax items such as food, books or domestic energy at reduced or zero rates. The national tax authority publishes current rates and which goods they cover.
Why does my invoice VAT differ by a cent?
VAT can be rounded on each line and then added up, or worked out once on the total at each rate. The two methods can differ by a cent or two. The calculator shows both when they differ; national rules decide which an invoice may use.
Sources
Last reviewed September 19, 2026