Add or remove VAT. Instantly.

HOW IT WORKS

VAT calculation in three steps

How VAT calculations work — and common mistakes to avoid

Adding VAT is straightforward: multiply the net price by (1 + VAT rate / 100). For the UK standard rate: £100 net × 1.20 = £120 gross. The £20 difference is the VAT amount.

Removing VAT (also called reverse VAT or VAT extraction) is where most people make mistakes. The correct formula is: Net = Gross ÷ (1 + VAT rate / 100). For the UK: £120 gross ÷ 1.20 = £100 net. The common error is to multiply £120 by 20% — that gives £24, not £20. The correct VAT amount is £20, not £24.

VAT rates vary significantly by country— from 5% in the UAE and Canada (GST) to 27% in Hungary. Even within countries, multiple rates apply: the UK has a 20% standard rate, a 5% reduced rate (domestic energy, children's car seats), and a 0% rate (most food, books, children's clothing). Always confirm which rate applies to your specific goods or services.

For invoicing, the VAT amount must be shown separately on your invoice. The invoice must state: the net amount, the VAT rate applied, the VAT amount, and the gross total. This calculator's invoice tab generates all four figures for single or multi-line invoices.

FAQ

Frequently asked questions