VAT / GST Calculator

Add VAT/GST to a net price or extract it from a gross price — see the net amount, tax amount and gross total instantly.

Inputs

Amount

VAT / GST rate

Calculation

Results

Gross (inc. tax)

$1,200.00

Net (ex. tax)

$1,000.00

Tax amount

$200.00

Tax rate

20.0%

Removing 20% tax from a gross price does NOT mean subtracting 20% — divide by 1.20 instead. A $120 gross price contains $20 of tax, not $24.

Comprehensive Guide & Formulas

By CalcSuite Editorial TeamUpdated 17 October 20268 min read

Direct Summary / AI Overview

Add or remove tax

Key Takeaways & Benchmarks

✓Adding: gross = net × (1 + rate). Extracting: net = gross ÷ (1 + rate).
✓Never subtract the percentage to extract tax — always divide.
✓VAT and GST are arithmetically identical; only names and rates differ.
✓Apply discounts before calculating tax.
✓Registered businesses generally reclaim VAT paid on business purchases.

How VAT/GST math works

VAT and GST are percentage taxes on the value of goods and services. Adding tax is multiplication: net × (1 + rate). Extracting tax is division: gross ÷ (1 + rate). The asymmetry trips everyone up — extracting 20% from $120 gives $100, because the 20% was calculated on the $100 net, not the $120 gross.

Businesses in the chain collect the tax and reclaim what they paid, so the cost lands on the final consumer. For the arithmetic, though, all you need is the rate and the direction: adding or extracting.

1
Enter the amount
The price you have — net or gross.
2
Set the tax rate
Your country's VAT/GST rate.
3
Choose the direction
Add tax to a net price, or extract it from a gross one.
4
Read the breakdown
Net, tax and gross amounts.

The formulas

"Adding: gross = net × (1 + rate)"

"Adding: tax = net × rate"

"Extracting: net = gross ÷ (1 + rate)"

"Extracting: tax = gross − net"

Worked example

Adding 20% VAT to a $1,000 net price: tax = $200, gross = $1,200. Extracting 20% VAT from a $1,200 gross price: net = $1,200 ÷ 1.20 = $1,000, tax = $200. Same $200 both ways — as it must be.

The trap: subtracting 20% from $1,200 gives $960, understating the net by $40. On a $120,000 contract, that mistake costs $8,000. Always divide to extract.

Getting tax right

▸Know whether your quotes are tax-inclusive or exclusive — and label them.
▸Divide, don't subtract, when extracting tax from a gross price.
▸Apply discounts before calculating VAT/GST, not after.
▸Check registration thresholds in your country before charging tax.
▸For cross-border B2B, investigate reverse-charge rules before adding local VAT.

Explore the topic cluster

Tax Calculator

See how tax calculator connects to your numbers.

Discount Calculator

See how discount calculator connects to your numbers.

Tip Calculator

See how tip calculator connects to your numbers.

Late Invoice Fee Calculator

See how late invoice fee calculator connects to your numbers.

Frequently asked questions

How do you add VAT to a price?+

Multiply the net price by (1 + rate). At 20% VAT, a $1,000 net price becomes $1,200 gross. Select 'Add tax' above and enter your numbers — the tax amount and gross total appear instantly.

How do you remove VAT from a gross price?+

Divide by (1 + rate) — not by subtracting the percentage. Removing 20% VAT from $1,200: $1,200 ÷ 1.20 = $1,000 net, so the tax was $200. Subtracting 20% would wrongly give $960. This is the single most common VAT mistake, and the 'Extract tax' mode exists to prevent it.

What is the difference between VAT and GST?+

Mechanically, almost nothing — both are consumption taxes collected at each stage of the supply chain, ultimately paid by the end consumer. 'VAT' is the term in the UK and EU; 'GST' is used in India, Australia, Canada and elsewhere. Rates and rules differ by country, but the arithmetic is identical.

What is the difference between tax-inclusive and tax-exclusive pricing?+

Tax-inclusive prices (common in the EU/UK) already contain VAT — the shelf price is what you pay. Tax-exclusive prices (common in the US) add sales tax at checkout. If you sell internationally, know which convention your customers expect; mixing them up causes pricing disputes.

How do I calculate VAT on a discount?+

Apply the discount first, then VAT on the discounted price — the same order as the Discount Calculator uses for sales tax. VAT on $1,000 with 20% off at 20% VAT: $800 net → $160 VAT → $960 gross.

Do freelancers need to charge VAT/GST?+

It depends on your country's registration threshold and where your clients are. The UK requires VAT registration above £90,000 of taxable turnover; India's GST threshold is ₹20–40 lakh depending on the state; Australia's is A$75,000. Below the threshold you generally don't charge it — check your local rules or an accountant.

What is reverse charge VAT?+

For cross-border B2B services (common in the EU), the buyer — not the seller — accounts for the VAT. The seller invoices at 0% with a reverse-charge note. If you freelance for EU clients, this is likely how your invoices should work rather than adding your local VAT rate.

Can businesses reclaim VAT/GST?+

Generally yes — VAT-registered businesses reclaim the VAT they pay on business purchases (input tax) against the VAT they collect (output tax), remitting only the difference. That's why B2B quotes are often shown excluding VAT: the buyer reclaims it anyway.