Calculate the VAT amount and final price for a given rate, whether you're adding VAT to a net price or removing it from a gross price.
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To add VAT to a net price: VAT Amount = Net Price × VAT Rate, and Gross Price = Net Price + VAT Amount. To remove VAT from a gross (VAT-inclusive) price: Net Price = Gross Price ÷ (1 + VAT Rate), and VAT Amount = Gross Price − Net Price.
For example, adding 20% VAT to a 1,000 net price gives 200 in VAT and a 1,200 gross price. Removing 20% VAT from a 1,200 gross price correctly gives back a 1,000 net price, not 1,200 × 0.8.
VAT (Value Added Tax) and GST (Goods and Services Tax) use the same underlying add/remove-tax math, they're just the terms used in different parts of the world (VAT in the UK and EU, GST in India, Australia and Canada, among others). Use whichever matches your local terminology, our GST Calculator uses identical logic under that name.
Because the 20% VAT was added on top of the net price, not the gross price, so subtracting 20% of the gross amount overcorrects. You need to divide by (1 + VAT rate) instead to recover the correct net price.
VAT rates vary by country and sometimes by product category, check your local tax authority for the correct standard or reduced rate that applies to your situation.
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