Add or remove VAT from any price instantly
VAT (Value Added Tax) is a consumption tax applied at each stage of production and sale. For most practical purposes, you need to either add VAT to a net price to get the gross price, or remove VAT from a gross price to find the net price.
Add VAT: Gross = Net × (1 + Rate ÷ 100)
Remove VAT: Net = Gross ÷ (1 + Rate ÷ 100)
VAT amount = Gross − Net
The critical mistake many people make when removing VAT: they multiply by the VAT rate instead of dividing by (1 + rate). To remove 20% VAT from £120, the answer is £120 ÷ 1.20 = £100, not £120 × 0.80 = £96. The correct net is £100, not £96.
| Country | Standard VAT rate | Reduced rate |
|---|---|---|
| United Kingdom | 20% | 5% (energy, children's car seats) |
| Germany | 19% | 7% (food, books) |
| France | 20% | 5.5% (food) / 10% (restaurants) |
| Sweden | 25% | 12% (food) / 6% (newspapers) |
| Australia (GST) | 10% | 0% (fresh food, medical) |
| Canada (GST) | 5% | 0% (most food, medical) |
| United States | No federal VAT | State sales tax: 0–10% |
| Net price | VAT rate | VAT amount | Gross price |
|---|---|---|---|
| £100 | 20% | £20 | £120 |
| £100 | 19% | £19 | £119 |
| £100 | 25% | £25 | £125 |
| £500 | 20% | £100 | £600 |
| £1,000 | 20% | £200 | £1,200 |
VAT-registered businesses must add VAT to their invoices and remit the collected VAT to the tax authority. However, they can also reclaim VAT paid on business purchases (input VAT). The net effect is that businesses act as tax collectors — the final consumer bears the VAT cost. This is why understanding VAT calculations is essential for invoicing, pricing, and accounting.
Multiply the net price by (1 + VAT rate ÷ 100). To add 20% VAT to £150: £150 × 1.20 = £180. The VAT amount is £30.
Divide the gross price by (1 + VAT rate ÷ 100). To remove 20% VAT from £180: £180 ÷ 1.20 = £150. Do not multiply by 0.80 — this gives the wrong answer.
VAT is collected at each stage of production and sale, with businesses reclaiming VAT on inputs. Sales tax is collected only at the final point of sale to the consumer. The US uses sales tax; most other countries use VAT or GST.
No — most countries have multiple VAT rates. Standard rates apply to most goods and services. Reduced rates typically apply to food, children's clothing, and medical supplies. Zero rates apply to exports and some essential goods.
Consumer-facing prices (retail, restaurants, e-commerce) are generally required to show VAT-inclusive prices in most countries. Business-to-business pricing often shows prices exclusive of VAT, with VAT added on the invoice. Always check local regulations for your specific context.