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ToolBoxGenie

VAT Calculator

Calculators · Added 15 August 2026

Add VAT to a net amount or pull it out of a gross total. Because VAT is almost always quoted inclusive, the backwards calculation is the one people need most — and it is where the common error lives, since VAT at 20% is one sixth of the gross, not one fifth.

Your figure is
%
Common rates

Rates in use somewhere, not tied to any country — check your own tax authority for the rate that applies to you.

How to use the vat calculator

  1. 1Choose whether your figure is net (excluding VAT) or gross (including it).
  2. 2Enter the amount.
  3. 3Set the VAT rate, or tap one of the common rates.
  4. 4Read the net, VAT and gross figures together.
  5. 5Use the VAT fraction shown to check the result by hand.

Examples

Adding VAT to a quote

Input
£1,000 net at 20%
Result
£200 VAT · £1,200 gross

The straightforward direction — a percentage of the net figure.

Extracting VAT from a receipt

Input
£1,200 gross at 20%
Result
£1,000 net · £200 VAT

Divide by 1.2, or take one sixth of the gross. Taking 20% of £1,200 gives £240, which is wrong.

A reduced rate

Input
£500 gross at 5%
Result
£476.19 net · £23.81 VAT

The VAT fraction at 5% is 1/21.

About the vat calculator

How VAT actually works

Value added tax is collected in stages along a supply chain. A manufacturer sells to a wholesaler and charges VAT; the wholesaler reclaims that VAT and charges its own on the onward sale; the retailer does the same. Each business pays the tax authority the difference between the VAT it charged and the VAT it paid, which is the tax on the value it added — hence the name.

The consumer at the end of the chain cannot reclaim anything, so they bear the whole amount. The elegance of the design is that the tax is collected in pieces from businesses that have records and returns, rather than entirely at the final sale, which makes it considerably harder to evade than a single-stage retail tax.

It also means VAT is not a cost to a VAT-registered business in the normal case — it passes through. This is why business-to-business prices in VAT countries are conventionally quoted net, while consumer prices must be shown gross: the two audiences care about different figures.

Inclusive pricing and the errors it produces

Consumer protection rules in most VAT jurisdictions require prices shown to consumers to include the tax, so a shelf price is what you pay. This is more transparent than exclusive pricing, and it produces one persistent arithmetic problem: nearly every VAT calculation a person actually needs runs backwards, from a gross figure to the net and VAT components.

That direction is where the one-fifth-versus-one-sixth error lives. It appears in expense claims, on invoices reconstructed after the fact, and in bookkeeping done by people who are confident with percentages and have not thought carefully about which base the percentage applied to. At 20% it overstates VAT by a fifth every time.

The defence is the fraction. Knowing that VAT at 20% is one sixth of the gross, and at 5% is one twenty-first, turns the reverse calculation into something checkable in your head. That is why those fractions are traditional in accounting practice and why this calculator surfaces them rather than just printing an answer.

Rates, categories and why no rate table appears here

VAT systems typically have a standard rate, one or more reduced rates, a zero rate, and a category of exempt supplies. The distinctions matter and are not intuitive: zero-rated and exempt both mean no VAT is charged to the customer, but a business making zero-rated supplies can reclaim its input VAT while one making exempt supplies generally cannot.

Which category a given item falls into is frequently unobvious and occasionally litigated at length — the boundary between foods at different rates has generated famous court cases in several countries. No general calculator can tell you which rate applies to a particular product.

This is also why no country rate table is built into this page. Rates change with budgets, temporary reductions are introduced and expire, and reduced-rate categories differ everywhere. A hardcoded table would be a factual claim that quietly becomes false, so the presets here are unlabelled and the correct rate is something to confirm with your own tax authority.

Frequently asked questions

Why is VAT at 20% one sixth of the gross rather than one fifth?
Because the 20% was charged on the net figure, which is smaller than the gross. If net is 100, VAT is 20 and gross is 120 — so the VAT is 20/120 of the gross, which is one sixth. Taking a fifth of the gross gives 24, overstating the VAT by 20%. This is the single most common VAT error, and it is why the fraction is shown on the result.
What is the VAT fraction?
A shortcut for extracting VAT from a gross amount in one step: rate ÷ (100 + rate). At 20% that is 20/120 = 1/6, at 25% it is 1/5, at 17.5% it was famously 7/47, and at 5% it is 1/21. Multiplying the gross by the fraction gives the VAT directly. Accountants use these because they are quick and easy to verify mentally, which is why this calculator shows the exact fraction where a tidy one exists.
What is the difference between VAT and sales tax?
VAT is charged at every stage of production, with each business reclaiming the VAT it paid on inputs, so the tax authority collects fractions along the chain and the end consumer bears the total. Sales tax is charged once, at the final retail sale. The consumer often pays a similar amount either way, but the collection mechanism differs entirely — and it is why VAT-registered businesses treat VAT as a flow-through rather than a cost, while sales tax on a business input is frequently a real expense.
Why are the rate buttons not labelled with countries?
Because VAT rates change, and a page that names a country next to a number becomes wrong the moment that country adjusts its rate — an inaccuracy sitting permanently on the page. The presets are simply rates in use somewhere. Check the current rate for your country and the specific goods or services with your own tax authority, since reduced and zero rates apply to different categories in every jurisdiction.
Does this handle reverse charge or partial exemption?
No. This works out the arithmetic of adding or removing VAT at a rate you supply. Reverse charge on cross-border services, partial exemption, margin schemes, flat rate schemes and the rules on what is zero-rated versus exempt are all matters of your jurisdiction's VAT law and your registration status. For a return, use the figures from your accounting records and your accountant's advice, not a general calculator.

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