Adding and removing VAT
Value-added tax is charged as a percentage of the net price. To add it, multiply the net price by (1 + rate). To remove it from a price that already includes it, divide by (1 + rate). Subtracting the rate from the gross price is a common mistake that takes off too much.
Worked examples
Add 20% VAT (the UK standard rate) to £100: 100 × 1.20 = £120, of which £20 is VAT.
Remove 21% VAT (the rate in Spain, the Netherlands and Belgium) from €121: 121 ÷ 1.21 = €100 net, €21 VAT.
Remove 23% (Ireland, Portugal, Poland) from €50: 50 ÷ 1.23 = €40.65 net, €9.35 VAT. Taking 23% off €50 instead would give €38.50, which is wrong.
Rates around the world
EU standard rates run from 17% in Luxembourg to 27% in Hungary, with reduced rates for food, books and some services. Australia and New Zealand call it GST (10% and 15%); Canada combines GST and provincial taxes. In the US there is no VAT; sales tax is set by states and cities and added at checkout.
How this works
In add mode, the tax is the amount times the rate and the gross price is the amount plus the tax. In remove mode, the net price is the amount divided by one plus the rate, and the tax is the net price times the rate. Results are rounded to the cent. Everything runs in your browser.
Frequently asked
How do I calculate VAT?
Multiply the net price by the rate. To get the gross price, multiply by (1 + rate).
How do I remove VAT from a price?
Divide the gross price by (1 + rate). For 20% VAT, divide by 1.2: £120 → £100.
Why not just subtract 20%?
Because VAT is a percentage of the net price, not of the gross price. Subtracting 20% of £120 gives £96, not £100.
Does this work for sales tax and GST?
Yes. They work the same way; enter your local rate.
Sources
Reviewed Oct 17, 2026 · test vectors fixtures/calculators/finance/vat-calculator/