The two formulas
Adding VAT
gross = net × (1 + rate ÷ 100)
Removing VAT
net = gross ÷ (1 + rate ÷ 100)
Worked examples
| You have | Rate | Net | VAT | Gross |
|---|---|---|---|---|
| Net 100.00 | 20% | 100.00 | 20.00 | 120.00 |
| Net 19.99 | 19% | 19.99 | 3.80 | 23.79 |
| Gross 119.00 | 19% | 100.00 | 19.00 | 119.00 |
| Gross 100.00 | 21% | 82.64 | 17.36 | 100.00 |
A common mistake is removing VAT by subtracting the rate from the gross price. 100 minus 21% is 79, not 82.64: the tax is a share of the net price, not of the gross.
VAT on an invoice with several rates
When one invoice mixes rates, add up the net amounts for each rate first and calculate VAT once per rate, rather than rounding the tax on every line. That keeps the totals consistent. The free invoice generator does this for you and shows a VAT breakdown per rate on the PDF. You can also use it for quotes, receipts and credit notes.
Frequently asked questions
How do I add VAT to a price?
Multiply the net price by the VAT rate as a decimal and add the result. At 20%, a net price of 100 has 20 of VAT, so the gross price is 120. In one step: gross = net × (1 + rate ÷ 100).
How do I remove VAT from a price that already includes it?
Divide the gross price by 1 plus the rate. At 20%, 120 ÷ 1.20 = 100 net, so the VAT is 20. Do not take 20% off the gross price: 120 − 20% gives 96, which is wrong.
Is sales tax calculated the same way as VAT?
The arithmetic is the same: a percentage added on top of a net price. The difference is in how the tax is collected and who charges it, which depends on where you and your customer are.
Which VAT rate should I use?
That depends on your country, the type of goods or service, and sometimes on where your customer is. Rates change, so check the current rate with your tax authority. The quick-pick buttons are common rates, not advice for any country.
How is the result rounded?
To the nearest cent, with halves rounded up (away from zero). The net amount plus the VAT always adds up exactly to the gross amount.
This calculator does arithmetic only and is not tax advice. Check rates and rules with your tax authority.