How to calculate VAT
Adding VAT and extracting VAT from a tax-inclusive price are not the same operation. The gross price already contains the tax fraction.
Calculate VATAdd tax to a net amount instantly.VAT formulas
Gross price equals net price × (1 + VAT rate ÷ 100). To find the net price from gross, divide gross by (1 + rate ÷ 100). VAT is the difference.
Worked example
At 20% VAT, a net price of 100 becomes 120 gross. From a gross price of 120, dividing by 1.20 returns a net price of 100 and VAT of 20.
Check the result before using it
Keep every input in the unit shown by the calculator and compare the result with a second source when it affects a purchase, contract or financial decision. Market prices, tax rates and provider terms may change. The worked example explains the arithmetic, while the linked calculator lets you replace every example value with figures that match your situation.
VAT questions
Why not subtract 20% from a VAT-inclusive price?
Because the 20% was calculated on the smaller net amount, not on the gross amount.
Which VAT rate should I use?
Use the current rate for the product, service and jurisdiction involved.