VAT, GST and sales tax in one tool
Most countries tax consumer spending, but the name and the mechanics differ. In the UK and the European Union it is value added tax (VAT), charged at every step of the supply chain and reclaimed by businesses on their purchases. Australia, New Zealand, Canada and India call a similar system goods and services tax (GST). The United States has no national VAT; instead states, counties and cities add a sales tax at the till, usually only on the final sale to the consumer.
For a quick calculation the maths is identical: a percentage is added to a net price, or has to be taken out of a price that already includes it. That is why this calculator lets you type any rate rather than offering a fixed list. A few common examples: 20% standard UK VAT, 5% reduced UK VAT, 19% in Germany, 21% in the Netherlands, 10% GST in Australia, or a combined 8.875% sales tax in New York City. Choose the currency symbol you prefer; it only changes how results are shown.
Formula: adding tax to a net price
If you know the price before tax, multiply by the rate to find the tax, and by one plus the rate to find the total.
tax = net price × rate ÷ 100
gross price = net price × (1 + rate ÷ 100)
Example: a freelancer in the UK invoices £1,250 plus VAT at 20%. The VAT is 1,250 × 0.20 = £250, so the invoice total is £1,500.
Formula: removing tax from a gross price
The classic mistake is to take 20% off a price that already includes 20% VAT. That gives the wrong answer, because the tax was calculated on the smaller net amount, not on the total. Divide by one plus the rate instead.
net price = gross price ÷ (1 + rate ÷ 100)
tax = gross price − net price
Example: a laptop costs £960 including 20% VAT. The net price is 960 ÷ 1.20 = £800 and the VAT is £160. Simply deducting 20% of £960 would give £192 of VAT, which is £32 too much.
A handy shortcut: the tax inside a gross price is rate ÷ (100 + rate) of the total. At 20% that is 20/120, or one sixth (16.67%). At 21% it is 21/121 (about 17.36%), and at 8.875% it is about 8.15%.
Worked examples at different rates
| Net price | Rate | Tax | Gross price |
|---|---|---|---|
| $100.00 | 8.875% | $8.88 | $108.88 |
| £100.00 | 20% | £20.00 | £120.00 |
| €100.00 | 19% | €19.00 | €119.00 |
| €100.00 | 21% | €21.00 | €121.00 |
| A$100.00 | 10% | A$10.00 | A$110.00 |
US sales tax: what to watch out for
US sales tax is set locally, so the rate depends on the delivery address, not just the state. A state rate of 6% can become 7% or more once county and city taxes are added. Many states exempt groceries or prescription drugs, and a handful of states have no statewide sales tax at all. Prices on shelves and online are normally shown before tax, which is why the receipt total is higher than the price tag. To check a receipt, select before tax, type the combined local rate and compare.
Tips for invoices and receipts
- Use the right direction. Ask yourself whether the amount you have already includes tax. Consumer prices in the UK and EU usually do; US shelf prices and most business-to-business quotes do not.
- Rounding. Invoicing software may round per line or on the total. Both are allowed in most countries, which explains differences of a cent or two.
- Mixed rates. If an invoice contains items at different rates, calculate each group separately and add up the results.
- Netherlands-specific rates? Use our Dutch VAT calculator with the fixed 21%, 9% and 0% rates.
- Pricing for profit. After working out the net price, our profit margin calculator shows what you actually earn.
Frequently asked questions
How do I add 20% VAT to a price?
Multiply the net price by 1.2. For example, £75 plus 20% VAT is 75 × 1.2 = £90, of which £15 is VAT. For other rates, multiply by 1 plus the rate as a decimal (1.19 for 19%, 1.05 for 5%).
How do I remove VAT from a price that includes it?
Divide the gross price by 1 plus the rate. At 20% you divide by 1.2: £90 ÷ 1.2 = £75 net, so the VAT is £15. Don’t subtract 20% of the gross price; that overstates the tax.
What fraction of a VAT-inclusive price is tax?
It is rate ÷ (100 + rate). With 20% VAT that is one sixth of the total, with 21% it is about 17.36% and with 10% GST it is one eleventh.
Can I use this calculator for US sales tax?
Yes. Choose before tax, enter the combined state and local rate for the place of sale (for example 8.875% in New York City) and the calculator returns the tax and the total you will pay at the checkout.
Is VAT the same as sales tax?
Not quite. VAT is collected at every stage of production and businesses reclaim the VAT they pay, so the end consumer bears the cost. US sales tax is usually charged only once, on the final retail sale. For a single price calculation the formula is the same.
Why is my answer one cent different from the invoice?
Because of rounding. Some systems round the tax on every line and others round once on the total. Both methods are common and legally accepted in most places.
Last reviewed: 2026-10-06. Results are estimates for information only.