The core formula
A VAT-exclusive price is the starting base. If an item costs 250 before VAT and the applicable rate is 5%, VAT is 12.50 and the customer pays 262.50. A VAT-inclusive total is different: divide 262.50 by 1.05 to recover the 250 base. Deducting 5% directly from 262.50 would not recover the original price.
Worked example
At 20% VAT, 100 net becomes 120 gross; 120 gross reverses to 100 net.
How to add or remove VAT
- Confirm whether the starting amount is net of VAT or already VAT-inclusive.
- To add VAT, multiply the net amount by the rate to find VAT and add it to net.
- To remove VAT, divide the gross amount by one plus the rate to recover the net amount.
- Subtract net from gross to isolate the VAT contained in an inclusive total.
Net, VAT and gross are three different amounts
The net amount is the value before VAT, VAT is the tax amount, and gross is the total including VAT. Reversing VAT must reconstruct the original net base rather than simply subtracting the percentage from gross.
This calculator handles arithmetic only. VAT registration, place-of-supply rules, zero-rating, exemptions, recoverability and filing treatment depend on the applicable jurisdiction and transaction.
Common mistakes
- Subtracting 20% from a 20%-VAT-inclusive total instead of dividing by 1.20.
- Confusing a zero-rated supply with a VAT-exempt supply.
- Using an assumed rate without verifying the transaction and jurisdiction.
Use the calculator
Add or remove VAT using any custom rate, with net, gross and quantity support.
Open VAT CalculatorDistinguish a tax-exclusive quote from a tax-inclusive invoice
A VAT-exclusive price is the starting base. If an item costs 250 before VAT and the applicable rate is 5%, VAT is 12.50 and the customer pays 262.50. A VAT-inclusive total is different: divide 262.50 by 1.05 to recover the 250 base. Deducting 5% directly from 262.50 would not recover the original price.
VAT rate selection and invoices
A standard-rate preset is an arithmetic starting point, not a determination of tax liability. Reduced rates, exemptions, zero-rating, place-of-supply rules, invoicing requirements and input VAT recovery vary by jurisdiction and transaction. Verify the correct treatment with the relevant authority before filing a return.
Frequently asked questions
How do I add 20% VAT to 100?
VAT is 20 and the gross amount is 120.
How do I remove 20% VAT from 120?
Divide 120 by 1.20 to recover 100 net; the VAT component is 20.
Does this calculator determine VAT liability?
No. It calculates amounts from a rate you provide; tax treatment must be verified separately.
What should I verify about vAT rate selection and invoices?
A standard-rate preset is an arithmetic starting point, not a determination of tax liability. Reduced rates, exemptions, zero-rating, place-of-supply rules, invoicing requirements and input VAT recovery vary by jurisdiction and transaction. Verify the correct treatment with the relevant authority before filing a return.