VAT Calculator
Add VAT to a net price or strip it out of a gross price at 20%, 5% or any rate you like - with the working shown.
The two VAT formulas
VAT (value added tax) is a percentage added to the sale price of most goods and services. Which formula you need depends on the figure you start with:
- Adding VAT to a net price:
VAT = net x rate/100, thengross = net + VAT. At 20%, multiply net by 1.2 to get gross in one step. - Removing VAT from a gross price:
net = gross / (1 + rate/100), thenVAT = gross - net. At 20%, divide gross by 1.2.
The classic mistake is removing VAT by subtracting 20% of the gross. On a 120 gross price that gives 96, but the real net price is 100. Dividing by 1.2 is the only correct way, because the VAT was originally charged on the smaller net amount.
Worked examples
A designer invoices 500 net at 20% VAT: the VAT is 100 and the client pays 600 gross. A shop receipt shows 47.99 gross including 20% VAT: dividing by 1.2 gives a net price of 39.99 and exactly 8.00 of VAT. On a 5% reduced-rate energy bill of 210 gross, the net is 200 and the VAT is 10.
Common VAT rates
| Rate | Typically applies to |
|---|---|
| 20% standard | Most goods and services in the UK |
| 5% reduced | Domestic energy, child car seats, some renovations |
| 0% zero-rated | Most food, books, children clothing |
| 23% / 21% / 19% | Standard rates in Ireland, Netherlands, Germany |
The VAT fraction shortcut
Accountants often use the "VAT fraction" to pull tax straight out of a gross total. At 20% the fraction is 1/6, so the VAT in any gross price is roughly the gross divided by 6: a 30 gross item contains 5.00 of VAT and 25.00 net. At 5% the fraction is 1/21. It gives the same answer as dividing by 1.2, just faster in your head.
Need the underlying percentage maths, or to knock a discount off first? The percentage calculator and discount calculator pair neatly with this one, and the tip calculator uses the same add-a-percentage logic.