Value added tax is quoted inclusively far more often than US sales tax, so the common task is not adding it but extracting it. This calculator does both, switched by a single control, because the two directions use genuinely different arithmetic and mixing them up is the usual source of error.
Extracting VAT uses the VAT fraction: at a 20% rate the tax is one sixth of the gross, not one fifth. The fraction is rate ÷ (100 + rate), which gives 1/6 at 20%, 1/21 at 5% and 3/23 at 15%. Accountants memorise these; the calculator derives them.
On the defaults, $480.00 gross at 20.0% contains $80.00 of VAT and $400.00 net. Note that 20.0% of the net $400.00 is the same $80.00 — the percentage applies to the net figure, never to the gross.
The formula
net- Price before VAT
gross- Price including VAT
r- VAT rate as a percentage
fraction- r ÷ (100 + r) — the share of a gross price that is VAT
How to use this calculator
- Enter the amount you have.
- Choose whether that amount excludes VAT or already includes it.
- Enter the VAT rate — 20% standard, 5% reduced in the UK, 19% or 21% across much of the EU.
- The gauge shows the VAT itself; net, gross and the VAT fraction appear below.
Worked examples
Extracting VAT from $480.00
At 20.0% the VAT fraction is 20.0/120.0 = 0.1667, so the VAT inside $480.00 is $80.00 and the net is $400.00. Taking 20.0% of the gross instead would overstate the tax by $16.00.
Adding VAT to a net price
Going the other way, $400.00 net plus 20.0% is $80.00 of VAT and $480.00 gross. The two directions reconcile exactly, which is the check worth running whenever a figure looks wrong.
How to read your score
Frequently asked questions
Why is VAT at 20% one sixth of the gross?
Because the gross is 120% of the net. The VAT is 20 parts out of 120, which simplifies to one sixth. The general rule is rate over one hundred plus rate.
What is the difference between VAT and sales tax?
VAT is charged at every stage of production with businesses reclaiming what they paid, so only the final consumer bears it. Sales tax is charged once, at the final retail sale. The consumer often cannot tell the difference from the receipt.
Can a business reclaim the VAT it pays?
A VAT-registered business generally reclaims input VAT on business purchases and remits output VAT on sales, paying over only the difference. That netting is the mechanism that stops tax compounding at each stage.
Which rate should I use?
The UK standard rate is 20% with a 5% reduced rate on domestic fuel and some other categories. EU rates range from about 17% to 27%. Enter whichever applies to the goods in question.
Does VAT apply to exports?
Exports outside the VAT area are usually zero-rated, meaning VAT is charged at 0% but input VAT remains reclaimable. Zero-rated is not the same as exempt, where input VAT cannot be recovered.
VAT rate reference
| Rate | VAT fraction | VAT in $1,000 gross | Net |
|---|---|---|---|
| 5% | 5/105 | $47.62 | $952.38 |
| 7% | 7/107 | $65.42 | $934.58 |
| 15% | 15/115 | $130.43 | $869.57 |
| 19% | 19/119 | $159.66 | $840.34 |
| 20% | 20/120 | $166.67 | $833.33 |
| 21% | 21/121 | $173.55 | $826.45 |
| 25% | 25/125 | $200.00 | $800.00 |
Multiply a gross figure by the VAT fraction to extract the tax in one step.