— Tax, VAT & Sales
Reverse VAT Calculator
Strip VAT out of a tax-inclusive price. Enter the gross amount and rate, or pick a country, to see the net price and VAT component. The same arithmetic works for reverse GST or tax-inclusive sales tax.
Net (excl. VAT)
£100
- VAT removed
- £20
- Gross (incl. VAT)
- £120
- Rate used
- 20%
— How it works
Net = gross ÷ (1 + rate ÷ 100); VAT = gross − net. You divide by one plus the rate — you do not subtract the rate, because the VAT sits on the smaller net amount.
Removing VAT means dividing, not subtracting
This is the trap that makes a reverse-VAT tool worth having. To take VAT off a gross price you divide by one plus the rate — not subtract the rate. A £120 price that includes 20% VAT breaks down to £100 net, not £96. The reason: the 20% VAT was charged on the £100 net, so it is £20, and £20 is one-sixth of the £120 gross, not one-fifth. Subtracting 20% of the gross removes too much, and the error grows with the rate — at 25% the net is gross ÷ 1.25 (four-fifths of the total), nowhere near “minus 25%”.
Worked example — £120 including 20% VAT: Net = £120 ÷ 1.20 = £100. VAT = £120 − £100 = £20 (one-sixth of the gross, the “VAT fraction”).
The VAT fraction shortcut
Accountants often use a “VAT fraction” to pull VAT straight out of a gross figure: it is rate ÷ (100 + rate). At 20% that is 20/120 = 1/6, so the VAT in any 20%-inclusive price is simply the gross divided by six. At a 5% reduced rate the fraction is 5/105 = 1/21. The calculator does this for you at any rate, and a country preset fills in the right standard, reduced or zero rate — handy when a receipt shows a gross total but you need the net for an expense claim or VAT return.
Reverse sales tax and GST are the same sum
Although the label says VAT, the maths is identical for any tax-inclusive price. If a country quotes prices including GST, or you have a US receipt where the total already includes sales tax, dividing by one plus the rate gives the pre-tax figure just the same. The difference between VAT and US sales tax is only convention — VAT is normally shown included, US sales tax added at the till — so reverse VAT and reverse sales tax are one calculation. Enter your rate and the result applies whatever the tax is called.
— Reader questions
How do I remove VAT from a price?
Divide the gross (VAT-inclusive) price by one plus the rate as a decimal. At 20%, divide by 1.20: a £120 price becomes £100 net, with £20 of VAT. Do not subtract the rate — that removes too much.
Why can’t I just subtract 20% to take VAT off?
Because the 20% VAT was charged on the net amount, not the gross. £120 minus 20% is £96, but the correct net is £100 — the VAT (£20) is one-sixth of the gross, not one-fifth. Always divide by 1 + the rate.
What is the VAT fraction?
A shortcut to get the VAT straight from a gross price: rate ÷ (100 + rate). At 20% it is 20/120 = 1/6, so VAT is the gross divided by six. At 5% it is 1/21. This calculator applies the right fraction for any rate.
How much VAT is in a £120 total at 20%?
£20. The net is £120 ÷ 1.20 = £100, and the VAT is the £20 difference — exactly one-sixth of the gross. Enter the gross and rate to break down any total.
Does this work for GST or US sales tax?
Yes — the calculation is identical for any tax-inclusive price. Divide by one plus the rate to get the pre-tax amount, whether the tax is called VAT, GST or sales tax. Just enter the appropriate rate.