How to use the VAT calculator
- Enter the amount and choose whether it is before VAT (net) or already includes VAT (gross).
- Type the VAT rate or tap one of the common rates.
- If you send invoices with income tax withholding or an equivalence surcharge, open that section and add the percentages.
- Read the breakdown. Use Copy results to paste the figures into an invoice or spreadsheet.
VAT formulas
Every figure is calculated from the net amount, which is the price before any tax is added.
Adding VAT
VAT = Net × Rate ÷ 100
Gross = Net + VAT
Removing VAT
Net = Gross ÷ (1 + Rate ÷ 100)
VAT = Gross − Net
Invoice total
Total = Net + VAT + Surcharge − Withholding
Worked example
A designer bills a client 1,000 before tax, with 21% VAT and 15% withholding. VAT is 1,000 × 0.21 = 210, so the price with VAT is 1,210. The withholding is 1,000 × 0.15 = 150, which the client pays straight to the tax office. The invoice total the designer receives is 1,210 − 150 = 1,060.
Going the other way, a receipt shows 1,210 including 21% VAT. Dividing by 1.21 gives a net price of 1,000, and the VAT inside the price is 210.
Why you can't just subtract the rate
A common mistake is to take 21% off a gross price. On 1,210 that gives 1,210 − 254.10 = 955.90, which is wrong. The VAT was calculated on the net amount, not on the gross amount, so you need to divide by 1 plus the rate. The calculator does this for you whenever you choose Including VAT.
Standard VAT rates in some countries
Most countries have a standard rate plus one or more reduced rates for items like food, books or public transport. At the time of writing, standard rates include:
| Country | Standard rate |
|---|---|
| United Kingdom | 20% |
| Germany | 19% |
| France | 20% |
| Spain | 21% |
| Italy | 22% |
| Ireland | 23% |
| United Arab Emirates | 5% |
| Saudi Arabia | 15% |
Rates change, so check your tax authority's website before you file a return. India uses GST rather than VAT, but the math for adding and removing it is exactly the same.
What withholding and equivalence surcharge mean
Withholding is income tax that your client keeps back and pays to the tax office on your behalf. It lowers the amount you receive but doesn't change the VAT. Equivalence surcharge is an extra percentage some suppliers must add when selling to small retailers who don't file their own VAT returns. It is charged on the net amount, on top of VAT.
Frequently asked questions
How do I calculate 20% VAT?
Multiply the net price by 0.20 to get the VAT, then add it to the net price. For 250, VAT is 50 and the gross price is 300.
How do I remove VAT from a price?
Divide the gross price by 1 plus the VAT rate as a decimal. To remove 20% from 300, divide by 1.20 to get 250.
Is VAT calculated before or after a discount?
VAT is charged on the price the customer actually pays, so apply the discount first and then add VAT.
Does withholding reduce the VAT I charge?
No. VAT is always based on the net amount. Withholding is subtracted from the invoice total after VAT has been added.
Can I use this calculator for GST or sales tax?
Yes. GST works the same way as VAT. For US sales tax, add your combined state and local rate as the VAT rate.
Last reviewed on by the Dailycaltor team.