VAT Calculator
Add VAT to a net price or extract it from a gross one — the direction that makes VAT different from sales tax.
Updated
VAT included
20.00of VAT
100.00 net + 20.00 VAT = 120.00 gross
- Net, before VAT
- 100.00
- VAT
- 20.00
- Gross, including VAT
- 120.00
- VAT as a share of gross
- 16.67%
Divide by 1.20 to get the net figure. Note the VAT is 16.67 percent of the gross price, not 20.00 percent — the rate is charged on the net.
Estimates for general information, not financial advice.
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In short
How do you work out VAT on a price?
It depends which figure you have. To add 20 percent VAT to a net price, multiply by 1.2. To extract it from a price that already includes it, divide by 1.2 — so a gross 120 is 100 net and 20 VAT, while a gross 100 is 83.33 net and 16.67 VAT.
VAT is usually inside the displayed price. Sales tax is usually added at the till.
How to use the VAT calculator
Choose the direction, enter the figure you have, and set the rate. The direction is the only thing this calculation can get badly wrong, and it is the reason a VAT tool is not a sales tax tool with different wording.
Sales tax is added at the till: the shelf price excludes it and the receipt lists it separately. VAT is built into the displayed price nearly everywhere it applies, so the usual question is not what to add but how much of what you already paid was tax. That is a division, not a multiplication.
x 1.2
To add 20 percent VAT
to a net price
/ 1.2
To extract 20 percent VAT
from a gross price
16.67%
VAT as a share of a gross price
at a 20 percent rate
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That third figure is where the arithmetic stops being obvious. A 20 percent rate does not mean 20 percent of the price you paid, because the rate is charged on the net amount rather than on the total. On a gross 100 the tax is 16.67, which is 20 percent of the 83.33 underneath it.
The divisor is the thing worth memorising rather than the formula. One plus the rate over a hundred: 1.2 at twenty percent, 1.05 at five, 1.19 at nineteen. Divide by it to strip the tax out, multiply by it to put the tax on. Everything else on this page follows from those two operations.
- 5 percent
- gross 105 · or 95.24 net inside 100
- 7 percent
- gross 107 · or 93.46 net inside 100
- 19 percent
- gross 119 · or 84.03 net inside 100
- 20 percent
- gross 120 · or 83.33 net inside 100
- 21 percent
- gross 121 · or 82.64 net inside 100
- 25 percent
- gross 125 · or 80 net inside 100
Read each row both ways. The left figure is what 100 becomes when VAT is added; the right is what was underneath a price of 100 that already included it. The two are never the same number, and the gap widens as the rate rises.
The tax that goes on top instead
US sales tax is added to the shelf price rather than built into it, so the calculation runs the other way and the rate is a straight percentage of what you see.
Open sales tax calculator →Common VAT rates showing what is added to a net price and what is already inside a gross one, with the tax as a share of the total paid.
| Rate | Divisor | Add to 100 | Inside a gross 100 | VAT share of gross |
|---|---|---|---|---|
| 5% | 1.05 | 105.00 | 95.24 net, 4.76 VAT | 4.76% |
| 7% | 1.07 | 107.00 | 93.46 net, 6.54 VAT | 6.54% |
| 10% | 1.10 | 110.00 | 90.91 net, 9.09 VAT | 9.09% |
| 15% | 1.15 | 115.00 | 86.96 net, 13.04 VAT | 13.04% |
| 19% | 1.19 | 119.00 | 84.03 net, 15.97 VAT | 15.97% |
| 20% | 1.20 | 120.00 | 83.33 net, 16.67 VAT | 16.67% |
| 21% | 1.21 | 121.00 | 82.64 net, 17.36 VAT | 17.36% |
| 23% | 1.23 | 123.00 | 81.30 net, 18.70 VAT | 18.70% |
| 25% | 1.25 | 125.00 | 80.00 net, 20.00 VAT | 20.00% |
Why extraction is the case that comes up
In most VAT systems, consumer prices must be displayed inclusive of tax. The number on the shelf is what you pay, and the tax is somewhere inside it. So the person reaching for a calculator is usually a business recovering the VAT on a purchase, or someone checking what a supplier actually charged.
- Total paid
- 1,200
- Divided by 1.2
- 1,000 net
- VAT inside it
- 200
- The wrong method
- 1,200 less 20 percent = 960
- That error
- 40, and it compounds
- Correct net
- 1,000
Forty on a single invoice is small; applied across a quarter of purchases it is a reclaim that does not reconcile, and the mismatch surfaces months later when somebody checks the figures against the returns.
The reverse case matters for anyone quoting. A business pricing work at 1,000 has to say whether that is before or after VAT, because the customer will pay 1,200 either way and only one of those is the revenue.
How VAT differs from sales tax beyond the arithmetic
The two look similar on a receipt and work quite differently underneath. Sales tax is charged once, at the final sale to a consumer. VAT is charged at every stage of production, with each business reclaiming what it paid its suppliers, so only the value it added is taxed.
Do
- Divide by one plus the rate to strip VAT out of a gross price
- State clearly whether a quoted price includes VAT
- Use the rate that applies to the goods, not just the standard one
- Keep the net figure for accounts, since that is the revenue
Don't
- Subtract the rate as a percentage of the gross price
- Assume the displayed price excludes tax in a VAT country
- Apply a single rate to a mixed basket without checking
- Treat a VAT figure as recoverable without being registered
Rates are also not uniform within a country. Most systems carry a reduced rate for food, books, children’s clothing or energy, and some goods are zero-rated or exempt entirely, which are different things. A mixed receipt can carry two or three rates, and averaging them produces a figure matching nothing.
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The formula, worked line by line
Two operations built from one number: the divisor, which is one plus the rate over a hundred. Multiply by it to add VAT, divide by it to take VAT out.
“A price increased by 20 percent does not come back by subtracting 20 percent. It comes back by dividing by 1.2.”
That asymmetry is not specific to VAT — it is true of every percentage increase — but VAT is where most people meet it, because the gross figure is the one on display.
divisor = 1 + rate / 100
gross = net x divisor
net = gross / divisor
VAT = gross - net
120 / 1.2 = 100 net, so the VAT was 20- Net 100, VAT added
- gross 120, VAT 20
- Gross 100, VAT extracted
- net 83.33, VAT 16.67
- Difference in the VAT
- 3.33
- As a share of the smaller
- about 20 percent
- Same rate, same figure entered
- different answers
- Why the direction matters
- a 20 percent error
Both rows are correct. They answer different questions about different starting figures, and the only thing that decides which one you want is whether the number in your hand already contains the tax.
Why the share of gross is always lower than the rate
Because the rate is applied to the net figure, which is smaller than the total. At 20 percent, VAT is a fifth of the net and a sixth of the gross. The general form is rate divided by one plus the rate, so 20 becomes 16.67 and 25 becomes exactly 20.
The fractions worth remembering
- 20 percent rate
- one sixth of the gross
- 25 percent rate
- one fifth of the gross
- 10 percent rate
- one eleventh of the gross
- 5 percent rate
- one twenty-first of the gross
The one-sixth rule is the useful one in the UK and much of Europe: to find the VAT in a price that includes it at 20 percent, divide by six. On 120 that gives 20, and on 99.99 it gives 16.66 without any decimals in the working.
If you take one thing from this page, take the divisor. Every VAT question is that number applied in one of two directions, and knowing which direction you are in is the whole skill.
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Questions people ask
How do I remove VAT from a price?
Divide by one plus the rate. At 20 percent that means dividing by 1.2, so a gross price of 120 has a net of 100 and 20 of VAT. Subtracting 20 percent instead gives 96, which is wrong — percentage increases do not reverse by subtraction.
Why is VAT 16.67 percent of the price I paid?
Because the rate is charged on the net figure, not on the total. A 20 percent rate on a net 83.33 gives 16.67 of tax and a gross of 100, so the tax is 20 percent of the net but only 16.67 percent of what you handed over. The general form is rate divided by one plus the rate.
What is the quick way to find 20 percent VAT in a price?
Divide the gross price by six. At a 20 percent rate the VAT is exactly one sixth of the VAT-inclusive total, so a price of 120 contains 20 of VAT and a price of 99.99 contains 16.66. It is the same as dividing by 1.2 and subtracting, with less arithmetic.
Is VAT the same as sales tax?
No. Sales tax is charged once at the final sale and added to the shelf price. VAT is charged at every stage of production, with businesses reclaiming what they paid suppliers, and consumer prices are normally displayed with it already included. That display difference is why the extraction direction matters.
Which VAT rate should I use?
Whichever applies to the specific goods, which is often not the standard rate. Most systems carry reduced rates for food, books, children’s clothing or domestic energy, and some items are zero-rated or exempt, which are different things with different consequences for reclaiming.
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