Add VAT to a net price or strip it back out of a gross one — with the rate presets already loaded, and net, VAT and gross always shown side by side.
%
For invoice lines — multiplies the amount before VAT is worked out.
Gross (including VAT)
—
Net (excluding VAT)—
VAT amount—
Gross (including VAT)—
Rate—
VAT as % of gross—
Gross ÷ net multiplier—
—
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Adding VAT vs removing VAT
These are not the same sum reversed, and confusing them is the most common VAT error on invoices.
Adding VAT to a net price: multiply by (1 + rate). At 20%, a net price of 100 becomes 100 × 1.20 = 120 gross.
Removing VAT from a gross price: divide by (1 + rate) — do not just subtract 20%. At 20%, a gross price of 120 gives 120 ÷ 1.20 = 100 net, and the VAT is 20. Subtracting 20% from 120 would wrongly give 96.
The VAT fraction shortcut
To pull the VAT straight out of a gross figure, multiply by the VAT fraction — rate ÷ (100 + rate):
Rate
VAT fraction of gross
Gross → net divisor
5%
1/21
÷ 1.05
10%
1/11
÷ 1.10
15%
3/23
÷ 1.15
20%
1/6
÷ 1.20
21%
21/121
÷ 1.21
25%
1/5
÷ 1.25
The 20% case is the one worth memorising: VAT is exactly one sixth of any VAT-inclusive price.
VAT and GST work identically in structure — tax is charged at every stage of the supply chain, and registered businesses reclaim what they paid on inputs, so only the end consumer bears the cost. US-style sales tax is different: it is charged once, at the final retail sale, and is normally quoted excluding tax on the shelf price. That is why European prices look tax-inclusive and American ones do not.
Rounding on invoices
Most tax authorities let you round VAT to the nearest minor unit per line or per invoice, but you must be consistent. On invoices with many lines, rounding each line separately can differ by a cent or two from rounding the invoice total — both are usually acceptable, but pick one method and stay with it, because inconsistency is what triggers queries during an audit.
Rates change, and reduced or zero rates apply to specific goods in every jurisdiction, so treat the presets here as a convenient starting point rather than tax advice — check the current rate for your category with your own tax authority or accountant. Working out prices from cost? The margin calculator and markup calculator work on net figures.
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Frequently asked questions
How do I remove VAT from a price?
Divide the gross price by 1 plus the rate as a decimal. At 20% VAT, divide by 1.20 — so 120 gross becomes 100 net with 20 VAT. Do not subtract 20% from the gross figure; that gives the wrong answer.
How much VAT is in a price that includes 20% VAT?
Exactly one sixth. Multiply the gross figure by 1/6, or by 0.16667 — a 120 total contains 20 of VAT. The general shortcut is rate ÷ (100 + rate).
What is the current UK VAT rate?
The standard rate is 20%, with a 5% reduced rate on things like domestic energy and children's car seats, and 0% on most food, books and children's clothing. Rates do change in Budgets, so confirm the current figure with HMRC before invoicing.
Is GST the same as VAT?
Structurally yes — both are multi-stage taxes with input credits, and the arithmetic here is identical. The name just differs by country: GST in Australia, New Zealand, India, Canada and Singapore; VAT across the UK, EU and much of Africa and Asia.
Should I show VAT-inclusive or VAT-exclusive prices?
Prices shown to consumers generally must include VAT in the UK and EU. Business-to-business quotes normally show net prices with VAT added separately. Check your local consumer pricing rules, as the requirement is legal rather than optional.