VAT Calculator Formula: Add Tax to a Net Price
A net price is the amount before VAT or GST. If the selected percentage rate is r, the calculation is:
- Tax = net price × (r ÷ 100)
- Gross price = net price + tax
For a £250 item at 20%, tax is £250 × (20 ÷ 100) = £50, and the gross price is £250 + £50 = £300. The original £250 remains the pre-tax amount; £50 is the tax component and £300 is the tax-inclusive total.
VAT Calculator Formula: Extract Tax from a Gross Price
A gross price already contains tax, so multiplying the entire amount by the rate overstates the tax portion. For percentage rate r, use:
- Net price = gross price ÷ (1 + r ÷ 100)
- Tax included = gross price − net price
At 20%, £120 ÷ 1.20 = £100 net, leaving £20 VAT. At 5%, AED 525 ÷ 1.05 = AED 500 net and AED 25 tax. The divisor changes with the selected rate: 1.05 for 5%, 1.10 for 10%, and 1.20 for 20%.
VAT Calculator: Country and Rate Choices
The calculator offers the following percentage choices. They are selectable inputs for arithmetic, not confirmation that a rate applies to every transaction in that place.
| Selection | Tax label in the calculator | Rates offered |
|---|---|---|
| United Kingdom | VAT | 0%, 5%, 20% |
| United Arab Emirates | VAT | 0%, 5% |
| India | GST | 0%, 5%, 12%, 18%, 28% |
| Australia | GST | 0%, 10% |
| Canada | GST/HST | 0%, 5%, 13%, 15% |
| United States | Tax estimate | 0%, 5%, 8%, 10% |
Product classifications, local rules and tax changes can affect the rate that belongs on an invoice. In particular, the US selection does not combine state, county and city rates, and the Canadian choices do not model every provincial tax combination.
VAT Calculator: What Each Result Means
The “price before tax” is the net amount produced by the calculation. The “VAT” line is the difference attributed to the selected percentage. The “total price” is the gross amount after tax is added—or the original amount when you remove tax from a total. Currency symbols follow the selected country. Because displayed results are rounded to two decimal places, a bookkeeping system may show a one-cent difference if it rounds each line item separately rather than rounding the final total.
VAT Calculator: Scope and Limitations
This page is a general-purpose VAT, GST and sales-tax arithmetic tool. It does not assess registration thresholds, exemptions, input-tax credits, reverse-charge treatment, place-of-supply rules, customs duties or filing obligations. Those questions require the rules that apply to the particular business and transaction. Check an official tax authority or a qualified adviser when the calculation will be used for compliance. For a quick price check, enter the verified percentage and use the separate net, tax and total figures to review the arithmetic.