— Tax, VAT & Sales
VAT Calculator
Add VAT to a net price or remove VAT from a VAT-inclusive total. Enter a rate directly or pick a country to use standard, reduced, or zero rates, with VAT, net, and gross shown.
Gross (incl. VAT)
$120
- VAT
- $20
- Net (excl. VAT)
- $100
- Rate used
- 20%
— How it works
Adding: VAT = net × rate ÷ 100, gross = net + VAT. Removing: net = gross ÷ (1 + rate ÷ 100), VAT = gross − net. Removing VAT means dividing, not subtracting the rate.
VAT is built into the price
The defining feature of VAT — and the big difference from US sales tax — is that the price on the label already includes it. When you see €120 in a shop at a 20% rate, the VAT is the €20 inside that total, not something added at the till. So the two everyday questions are the reverse of each other: a business adding VAT to a net price wants the gross (net + VAT), while a shopper or accountant with a VAT-inclusive total wants the net hiding inside it. Choose “add VAT” or “remove VAT” and the calculator gives the VAT amount along with both the net and gross figures.
Worked example — €100 net at 20% VAT: Adding: VAT = €100 × 20% = €20, so the gross price is €120. Removing from a €120 gross: net = €120 ÷ 1.20 = €100, and the VAT is €20.
Removing VAT means dividing, not subtracting
The classic VAT mistake is taking 20% off a gross price to find the net. It does not work, because the 20% VAT was charged on the smaller net amount, not the gross. Subtract 20% of €120 and you get €96; the real net is €100. To strip VAT out you divide by one plus the rate — €120 ÷ 1.20 = €100 — and the VAT is the difference. The higher the rate, the bigger the error from subtracting: at a 25% rate, the net is the gross ÷ 1.25, four-fifths of the total, not three-quarters.
Standard, reduced and zero rates
Each country sets a standard VAT rate — 20% in the UK, 19% in Germany, up to 27% in Hungary — but applies lower rates to certain goods. Reduced rates cover things like food, children’s items, books and domestic energy; some essentials are zero-rated (charged at 0%, but still within the VAT system). Pick a country to use its standard rate, then switch the rate type under the advanced options for a reduced or zero rate. The reduced figures here are representative — most countries operate several reduced tiers — so check the specific rate for your goods. Five things stay constant: VAT is inclusive, removing it means dividing, and the net, gross and VAT always reconcile.
— Reader questions
How do I add VAT to a price?
Multiply the net price by the VAT rate as a decimal and add it. €100 at 20% VAT is €100 × 0.20 = €20 of VAT, for a €120 gross price. Choose “add VAT”, enter the net amount and the rate.
How do I remove VAT from a gross price?
Divide the gross by one plus the rate — do not subtract the rate. A €120 total at 20% is €120 ÷ 1.20 = €100 net, with €20 of VAT. Choose “remove VAT” to do this.
Why can’t I just subtract 20% to remove VAT?
Because the 20% VAT was charged on the net, not the gross. Subtracting 20% of the gross removes too much — €120 minus 20% is €96, but the correct net is €100. Dividing by 1.20 gives the right answer.
What is the difference between VAT and US sales tax?
The maths is the same, but VAT is included in displayed prices and collected at each stage of production, while US sales tax is added at the register on top of the shelf price. So with VAT you usually remove tax from a total; with US sales tax you usually add it.
What are reduced and zero VAT rates?
Besides the standard rate, countries apply reduced rates to items like food, books and energy, and zero rates (0%, but still VAT-registered) to certain essentials. Pick a country and choose the rate type under the advanced options; the reduced figures shown are representative.