The Calculator Helper

VAT Calculator

Add VAT to a net price or work backwards from a gross price.

£
%
Gross price
£0
Net (before VAT)
£0
VAT amount
£0
Gross (with VAT)
£0
Rate
—

To remove VAT, divide the gross by 1 plus the rate — not by subtracting the percentage. Rates vary by country and product.

Net, VAT and gross

VAT sits on top of a net price to give the gross price a customer pays. Adding it is straightforward; removing it trips people up, because the tax was added to the smaller net figure, not the gross.

gross = net × (1 + rate)　·　net = gross ÷ (1 + rate)

That division is the key to extracting VAT correctly. The calculator handles both directions and always shows the net, the VAT and the gross side by side.

Worked example

Adding 20% VAT to a £100 net price gives £20 of VAT and a £120 gross price. Working backwards, a £120 gross at 20% contains £20 of VAT and £100 net.

Getting VAT right

The most common mistake is subtracting the rate from a gross price to find the net — it removes too much. Dividing by 1 plus the rate is the correct reverse. For invoices and bookkeeping, keeping net, VAT and gross clearly separated avoids costly errors.

Worth remembering

  • Divide, don’t subtract. Net = gross ÷ (1 + rate).
  • Rates differ. Standard, reduced and zero rates vary by item and country.
  • Keep the three apart. Net, VAT and gross each have their place on an invoice.

Frequently asked questions

What is VAT?
Value Added Tax — a consumption tax added to most goods and services in many countries (similar to GST). The net price is before VAT; the gross price is what the customer pays.
How do I remove VAT from a gross price?
Divide by 1 plus the rate as a decimal, not by subtracting the percentage. At 20%, net = gross ÷ 1.2 — so £120 gross gives £100 net, not £96.
Why can’t I just subtract 20%?
Because the 20% was added to the smaller net figure, not the larger gross. Subtracting 20% of the gross removes too much. Dividing by 1.2 reverses the addition correctly.
What rate should I use?
It depends on your country and the type of product — standard rates vary, and some goods are reduced-rated or exempt. Enter the rate that applies to your situation.