Last reviewed: 2026-09-07
Quick Answer

How do I calculate VAT on a price?

To add VAT to a net price, multiply by 1 plus the rate as a decimal. For 20% VAT on a $100 net item, calculate $100 x 1.20 = $120 gross. To extract VAT from a gross price, divide by 1 plus the rate. For the same item: $120 / 1.20 = $100 net, with $20 being VAT. UK standard rate is 20%, most EU countries sit between 19 and 25 percent.

VAT Calculator

Add VAT to a net price or split VAT from a VAT-inclusive total in seconds.

No sign-up requiredTransparent formulasFormula v1.2 • Data 2026
Gross Amount
$120.00

VAT Calculation

Gross Amount (incl. VAT)
$120.00
Net Amount$100.00
VAT Amount$20.00
Gross Amount$120.00
Effective Tax Rate16.7%
At 20% VAT, $20.00 is added to a $100.00 net price.

VAT Formulas

Add or extract - different math
ADD VAT: VAT Amount = Net Amount × VAT Rate / 100 Gross Amount = Net Amount + VAT Amount EXTRACT VAT (reverse): Net Amount = Gross Amount / (1 + VAT Rate / 100) VAT Amount = Gross Amount - Net Amount Effective Tax Rate = VAT Amount / Gross Amount × 100

Key insight: Extracting VAT is NOT the same as subtracting the percentage. On a $120 gross with 20% VAT, the net is $100 (not $96). The VAT is calculated on the net, not the gross.

FAQ

Why is reverse VAT not simple subtraction?
VAT is added to the net amount. So 20% VAT on $100 = $120. To reverse, divide by 1.20, not subtract 20%. $120 / 1.20 = $100. Subtracting 20% gives $96, which is wrong.
What is the effective tax rate?
The effective rate shows VAT as a percentage of the gross total. At 20% VAT, the effective rate is 16.67% - meaning VAT is 16.67% of what the customer pays.
Does this work for all countries?
Yes. Enter your local VAT rate. Common rates: UK 20%, Germany 19%, France 20%, Australia GST 10%, India GST 18%. The formula is universal.
For informational purposes only. Verify VAT calculations with your accountant for tax filing. This is not tax advice.

How this calculator works

This calculator handles both directions of VAT calculation. To add VAT to a net price, it multiplies the net amount by (1 + VAT rate / 100) to produce the gross (VAT-inclusive) price, with the VAT amount being the difference. To extract VAT from a gross price, it divides the gross by (1 + VAT rate / 100) to recover the net amount, with the VAT being the difference. The same formula handles any VAT rate, which is why the calculator works for UK 20%, German 19%, Hungarian 27%, and any other jurisdiction.

Formula used
Add VAT: Gross = Net × (1 + Rate/100); VAT = Gross - Net. Extract VAT: Net = Gross / (1 + Rate/100); VAT = Gross - Net.

Assumptions

  • The VAT rate you enter applies uniformly to the entire price (no mixed-rate or partially-exempt items).
  • The transaction is fully subject to VAT (not zero-rated, exempt, or outside scope).
  • You are entering a single price; bulk price lists or invoices with multiple lines should be calculated line by line.

Limitations

  • This calculator does not select or recommend the correct VAT rate for your jurisdiction or transaction type. You must enter the rate.
  • It does not handle reduced-rate items, zero-rated supplies, or VAT-exempt categories that some jurisdictions apply to specific goods.
  • It does not model reverse-charge VAT (B2B cross-border), the Tour Operators Margin Scheme, or other special VAT regimes.
  • It does not handle VAT registration thresholds, MOSS/IOSS schemes for digital services, or import VAT calculations.

For our overall editorial process and how we maintain calculator accuracy across the site, see our full methodology page.

Sources used for this calculator

Each data point or rate below is taken from the source listed (official pages where available; editable assumptions are labeled) and was verified on the date shown.

Data point or rateValue usedSourceLast checkedNotes
UK standard VAT rate20%HMRC VAT rates on different goods and services2026-04-24Default standard rate for most goods and services
UK reduced VAT rate5%HMRC VAT rates2026-04-24Applies to home energy, mobility aids, and certain other items
EU minimum standard VAT rate15%European Commission VAT directive2026-04-24Required floor under the EU VAT Directive
EU standard VAT rate range17% to 27%European Commission VAT in Europe2026-04-24Across all EU member states
Highest EU VAT rate27% (Hungary)European Commission VAT rates2026-04-24-
Lowest EU VAT rate17% (Luxembourg)European Commission VAT rates2026-04-24-

Compare scenarios

Change the amount to compare outcomes. Scenarios A and B use the same engine as the calculator above.

ScenarioamountVAT result
Current----
Scenario A--
Scenario B--

Sensitivity to amount

How the VAT result moves as this one input changes, holding everything else fixed.

Extracting VAT is not the same as subtracting the rate: $120 gross at 20% contains $20 VAT (divide by 1.20), not $24.

Worked example

Add 20% VAT to $100 net → $20 VAT, $120 gross. Extract VAT from $120 gross → $120 ÷ 1.20 = $100 net, so VAT = $20.

Related reading

How to Calculate VAT - Learn how VAT is added and removed, with worked examples.

Etsy Fees Explained - Every Etsy fee broken down with worked examples.

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