What is VAT?
Value Added Tax (VAT) is a consumption tax applied to taxable goods and services. For a calculator, the central distinction is simple: the net price is before VAT, the VAT amount is the tax added to that base, and the gross price is what the customer pays when VAT is included.
The same arithmetic appears in many countries under different tax systems and names. What changes from jurisdiction to jurisdiction is the applicable rate, the goods or services covered, and the rules for exemptions, reduced rates, invoicing and recovery. This calculator therefore lets you enter the rate rather than assuming one universal VAT rate.
Net means before VAT
If a product is €100 net and the VAT rate is 20%, the tax base is €100.
VAT is added to the base
€100 × 20% = €20 VAT. The rate is applied to the net amount.
Gross includes the tax
€100 + €20 = €120 gross. The customer pays the gross amount.
VAT calculator formulas
Let N be the net price, G the gross price, and r the VAT rate expressed as a decimal. For example, 20% becomes 0.20.
Add VAT to a net price
G = N × (1 + r)
- N
- VAT-exclusive net price
- r
- VAT rate as a decimal
- G
- VAT-inclusive gross price
Remove VAT from a gross price
VAT = G − N
- G
- VAT-inclusive gross price
- N
- VAT-exclusive net price
VAT fraction of the gross price
At 20%, this is 0.20 ÷ 1.20 = 1/6 ≈ 16.67% of the gross price.
VAT calculator examples
These examples show the two directions separately so the percentage base stays clear.
Example 01 · Add 20% VAT
A service costs €100 before VAT.
Example 02 · Remove 20% VAT
An invoice total is €120 including VAT.
Example 03 · 5% VAT
A taxable item is €200 net and the rate is 5%.
Example 04 · Why gross is not the base
At 25% VAT, €100 net becomes €125 gross.
VAT rates, reduced rates and zero rates
VAT rates are jurisdiction-specific. A standard rate in one country is not automatically the correct rate for another country, product, service or transaction. Some systems also have reduced rates, zero-rated supplies or exemptions.
| Rate entered | What the calculator does | €100 net becomes | VAT share of gross |
|---|---|---|---|
| 0% | No VAT added | €100.00 | 0% |
| 5% | Add €5 VAT | €105.00 | 4.76% |
| 10% | Add €10 VAT | €110.00 | 9.09% |
| 20% | Add €20 VAT | €120.00 | 16.67% |
| 25% | Add €25 VAT | €125.00 | 20% |
These rows are mathematical illustrations, not a list of rates that apply to a particular jurisdiction. Always use the rate applicable to the transaction you are actually calculating.
Where VAT calculations appear
VAT arithmetic appears on invoices, receipts, quotations, price lists, bookkeeping records and purchase analysis. A buyer often sees the gross price, while a business may need to separate the net value and VAT amount for accounting.
Read the invoice in three layers
1. Net: the tax-exclusive value of the taxable supply.
2. VAT: the tax calculated from the applicable rate and base.
3. Gross: the amount due when the VAT is included.
The calculator reproduces this separation mathematically so you can move from a quoted net price to a customer-facing gross price, or reverse an inclusive total back to its net and VAT components.
How to check a VAT calculation
Forward check
Take the net value, multiply it by the rate, then add the VAT. The result should equal gross.
Reverse check
Take the gross value and divide by 1 + r. The difference between gross and net should equal VAT.
Rounding can create a one-cent difference in real invoices. If your accounting system has specific rounding rules, use those rules for the final posted transaction rather than assuming every intermediate value is rounded identically.
VAT calculator FAQ
The net price excludes VAT. The gross price includes VAT. If the rate is 20%, a €100 net price becomes €120 gross.
Convert the VAT rate to a decimal, multiply the net price by that rate to find VAT, then add VAT to the net price. Equivalently, multiply net by 1 + rate.
Divide the VAT-inclusive gross price by 1 + the VAT rate. Then subtract the net amount from gross to find the VAT included.
Because the 20% rate is applied to the net base, not to the gross total. At 20%, VAT is 20/120 = 16.67% of the gross price.
No. VAT rates and rules depend on jurisdiction, transaction and sometimes product category. Enter the rate that applies to your calculation.
Yes. Mathematically, a 0% rate means gross equals net and the VAT amount is zero. Whether a transaction is legally zero-rated or exempt is a separate tax-law question.