Add or remove VAT from a price
To find out how much of a price is tax, taking the percentage off is not enough. Remove VAT from a price that already includes it, or add it to a net amount, with the rate that applies in your country.
How to remove VAT from a price (and how to add it)
Choose whether to remove tax from a price that already includes it or add it to a net amount, and enter the amount and the rate. The calculator gives you the net amount, the tax, the final price and what share of the price is tax. It works for VAT, GST or any proportional sales tax.
Example: a price of 121 with 21% VAT has a net amount of 100 and 21 of tax. Taking 21% off 121 would give 95.59, which is not the net amount: it is the most common mistake.
How it is calculated
- Remove: net = gross price ÷ (1 + rate). Tax = gross price − net.
- Add: tax = net × rate. Gross = net + tax.
- Taking the rate off the gross price (price × (1 − rate)) does not give the net amount: it is a common mistake.
Assumptions
- A single proportional tax on the price (VAT, GST or sales tax).
- You enter the rate: it depends on the country, the region and the product.
Frequently asked questions
How do you remove VAT from a price?
Divide the price including VAT by (1 + rate): net = price ÷ (1 + rate). At 21%, 121 ÷ 1.21 = 100. The VAT is the difference: 21.
Why can't I just take the percentage off the total?
Because tax is charged on the net amount, not on the total. Taking 21% off 121 gives 95.59, less than the real net amount of 100. Of the final price, tax is only 17.4%.
How do you add VAT to a price?
Multiply the net amount by (1 + rate): 100 at 21% is 121.
Which VAT rate should I use?
The one that applies in your country, your region and to your product or service: there are standard rates, reduced rates and exemptions. The calculator applies no default rate; check the rules or ask your accountant.
Does it work for sales tax or GST?
Yes, for any tax that is a percentage of the price. If an invoice has lines at different rates, work out each rate separately.