VAT Calculator

What is VAT?

Value-added tax (VAT) is a consumption tax charged on most goods and services in many countries. It is collected at each step of the supply chain whenever value is added, from manufacturers to wholesalers to retailers. Ultimately, the final consumer bears the cost of VAT included in the price they pay.

VAT systems vary by country, but a few features are common:

• Standard rate: a main VAT rate that applies to most taxable goods and services (often between 15% and 25%).
• Reduced rates: lower rates applied to specific items such as groceries, books, or public transport.
• Zero-rated or exempt: some supplies are taxed at 0% (zero-rated) or are exempt from VAT altogether, such as certain financial services, healthcare, or education.

On receipts and invoices, you will often see the net amount (before VAT), the VAT rate, the VAT amount, and the total amount due. This calculator focuses on these core values so you can understand how VAT affects your prices.

VAT formulas used by the calculator

The calculator uses straightforward formulas that work with any VAT rate. Let r be the VAT rate in percent (for example, 20 for 20%), and let A be the amount you enter. The logic depends on whether you are adding or removing VAT.

1. Adding VAT to a net price (VAT-exclusive amount)

If the amount you enter is a net price that does not include VAT, the calculator applies this formula to find the total price including VAT:

The VAT amount is then:

VAT = Total − Net

2. Removing VAT from a tax-inclusive price

If the amount you enter already includes VAT (a gross price), the calculator reverses the formula to find the underlying net amount:

Net = Total ÷ (1 + r / 100)

The VAT portion is again the difference between the total and the net:

VAT = Total − Net

These formulas are the same regardless of the currency you use. The only thing that changes is the VAT rate r, which you can set according to your local rules (for example 5%, 7.5%, 19%, 20%, or any other applicable rate).

How to use the VAT calculator step by step

1. Enter the amount. Type the price into the amount field. Use the price that is either before VAT (if you want to add VAT) or already includes VAT (if you want to remove VAT). You do not need to enter a currency symbol.
2. Enter the VAT rate (%). Specify the VAT rate you want to use as a percentage. For example, enter 20 for 20% VAT or 7.5 for 7.5% VAT.
3. Choose the calculation mode.
   • Select Add VAT to the amount if your amount is VAT-exclusive and you want to know the VAT and tax-inclusive total.
   • Select Remove VAT from a tax-inclusive total if your amount already includes VAT and you want to isolate the net price and the VAT portion.
4. Run the calculation. Click the calculate button. The calculator will show you the net amount, the VAT amount, and the total, based on your chosen mode.
5. Copy or record the result. You can copy the summary into an invoice, spreadsheet, or accounting system as needed.

If your situation involves different VAT rates on different items (for example, one product at the standard rate and another at a reduced rate), calculate each line separately and then add the results.

Interpreting your VAT results

After you run the calculation, you will normally see three key numbers:

• Net amount: the price before VAT. This is often the amount you want to record as income or cost in your accounts.
• VAT amount: the tax calculated at the rate you selected. This is the portion that is paid to the tax authority if you are a VAT-registered business.
• Total amount: the full price including VAT that the customer pays.

Which number matters most depends on your role:

• Consumers usually focus on the total price, but may want to know the VAT share for reimbursement or expense claims.
• Freelancers and small businesses often need the net and VAT amounts separately for invoicing, bookkeeping, and VAT returns.
• Online sellers may use the net price for internal pricing and the total price for storefront display.

Worked example: adding and removing VAT at 20%

This example shows how the calculator behaves in both modes using a 20% VAT rate. Assume the currency is dollars, but the logic is the same for any currency.

Example 1: Add VAT to a VAT-exclusive price

You sell a product for 100.00 before VAT and you need to know the total including 20% VAT.

1. Enter 100 as the amount.
2. Enter 20 as the VAT rate.
3. Select Add VAT to the amount.

The calculator applies:

Total = 100 × (1 + 20 / 100) = 100 × 1.20 = 120.00

The VAT amount is:

VAT = 120.00 − 100.00 = 20.00

Result:

• Net amount: 100.00
• VAT amount: 20.00
• Total amount: 120.00

Example 2: Remove VAT from a tax-inclusive price

You have a bill for 120.00 that already includes 20% VAT, and you want to know the net price and VAT portion.

1. Enter 120 as the amount.
2. Enter 20 as the VAT rate.
3. Select Remove VAT from a tax-inclusive total.

The calculator applies:

Net = 120 ÷ (1 + 20 / 100) = 120 ÷ 1.20 = 100.00

The VAT amount is again:

VAT = 120.00 − 100.00 = 20.00

Result:

• Net amount: 100.00
• VAT amount: 20.00
• Total amount: 120.00

VAT-inclusive vs VAT-exclusive prices

Different countries and businesses display prices differently. Understanding the difference between VAT-inclusive and VAT-exclusive amounts helps you choose the correct mode in the calculator.

• VAT-inclusive price: the sticker or advertised price already includes VAT. Many consumer prices in Europe follow this approach.
• VAT-exclusive price: VAT is added on top of the displayed price. This is common for business-to-business quotes, wholesale lists, and some professional services.

Use the comparison table below as a quick reference.

Common use cases for this VAT calculator

People use a VAT calculator for many practical purposes. Typical situations include:

• Invoicing clients: checking that VAT on invoices is calculated correctly before you send them.
• Reviewing supplier bills: confirming that the VAT charged by suppliers matches the agreed rate.
• Online store pricing: setting net prices and working out how they appear to customers once VAT is included.
• Travel and expenses: splitting out VAT from hotel bills, car rentals, and other receipts for reimbursement or accounting.
• Comparing offers: comparing quotes that are given with or without VAT to understand the true cost.

While the calculator provides an immediate numerical answer, always refer to your local VAT legislation or a qualified adviser if you are unsure about which rate applies, or how to treat specific types of transactions.

Limitations and assumptions

This calculator focuses on standard VAT arithmetic. It does not attempt to cover every detail of VAT law or compliance. Keep these assumptions and limitations in mind when you use it:

• Single VAT rate per calculation: each calculation assumes only one VAT rate. If an invoice includes items taxed at different rates, run a separate calculation for each rate and sum the results.
• No automatic rate lookup: you must enter the VAT rate yourself. The tool does not check whether the rate is correct for your country, product, or service.
• Rounded values: results are typically rounded to two decimal places. In some jurisdictions, specific rounding rules may apply at line or invoice level.
• Not a filing tool: this calculator helps with figures, but it does not submit returns, track deadlines, or store records for compliance purposes.
• Generic, jurisdiction-neutral logic: VAT rules vary widely between countries (and sometimes between regions within a country). The formulas here are generic and are not tailored to any single tax system.
• No legal or tax advice: outputs are for information only and should not be treated as professional advice. For binding guidance on your obligations, consult a qualified accountant or tax adviser.

For more advanced scenarios, such as cross-border supplies, digital services, or mixed supplies with multiple VAT treatments, specialist guidance is recommended.

Frequently asked questions about the VAT calculator

Can I use this VAT calculator with any currency?

Yes. The calculator works with any currency because the formulas depend only on the VAT rate, not on specific currency units. Just make sure all amounts in a given calculation use the same currency.

Which VAT rate should I enter?

Enter the VAT rate that applies to your transaction, expressed as a percentage. For example, if your local standard VAT rate is 21%, type 21. If a reduced rate of 5% applies, type 5. Always check official sources or professional advice if you are unsure which rate is correct.

Does the calculator handle multiple VAT rates on one invoice?

No. Each calculation uses one rate. If your invoice has items taxed at different rates, calculate each group separately and then add together the net, VAT, and total amounts for your full invoice.

Will the results match my accounting or invoicing software exactly?

In most simple cases, the numbers should match or be very close. However, some systems apply specific rounding rules per line, per item, or per invoice. Small differences can occur if your software rounds at a different step. When in doubt, rely on the figures produced by your accounting system for official reporting.

Is this tool suitable for filing VAT returns?

The calculator can help you understand and check amounts used in your VAT returns, but it is not a complete filing solution. It does not store transactions, manage deadlines, or verify eligibility. For full compliance, use dedicated tax software or consult a professional.

Editorial notes and updates

This calculator is based on standard VAT arithmetic used in many jurisdictions. It is intended as a general-purpose tool rather than a country-specific guide. VAT rules, thresholds, and rates change over time, so always verify that the rate you enter is current. If you work with significant amounts or complex situations, consider speaking with an accountant or tax adviser to confirm how VAT should be applied.