Reviewed November 2026 · Estimate only, not financial advice.
Value Added Tax is charged on most goods and services in the UK and EU. Enter an amount and a VAT rate, choose whether the price already includes VAT, and see the tax and the price both ways.
How This VAT Calculator Works
Adding VAT is simple multiplication: VAT = net price × rate, and the gross price is net + VAT. Removing VAT from a gross price is the reverse — divide by (1 + rate), because the VAT is a percentage of the net price, not of the gross price. That is the mistake most people make: 20% VAT on a $120 gross price is $20, not $24.
Add VAT: VAT = Net × rate · Gross = Net × (1 + rate)
Remove VAT: Net = Gross ÷ (1 + rate) · VAT = Gross − Net
Rate as a decimal: 20% = 0.20. The VAT share of a gross price at 20% is 16.67%, not 20%.
Worked example: $100 excluding VAT at 20%. VAT = $100 × 0.20 = $20.00. Price including VAT = $120.00. Going the other way: $120 ÷ 1.20 = $100.00 net, so the VAT inside the $120 is $20.00.
Practical tips
Common VAT rates.UK standard rate is 20% (reduced 5%, zero-rated essentials). EU standard rates range from 17% to 27%. The US has no VAT — it uses sales tax instead (see the Sales Tax Calculator).
Businesses reclaim VAT.VAT-registered businesses charge VAT on sales and reclaim VAT on purchases, so VAT is usually a pass-through for them — the end consumer carries the cost.
Do not take 20% off the gross price.Removing 20% VAT from $120 gives $96 — wrong. The right net price is $100. Always divide by 1.20, never multiply by 0.80.
Check the rate on the item.Food, books, children's clothes and energy often carry reduced or zero rates. Using the standard rate on a zero-rated item overstates the tax.
Frequently Asked Questions
What is VAT?
Value Added Tax — a consumption tax charged on most goods and services in the UK, EU and many other countries. It is added at each stage of production and ultimately paid by the end consumer.
How do I add VAT to a price?
Multiply the net price by (1 + rate). At 20% VAT, a $100 net price becomes $120, and the VAT is $20.
How do I remove VAT from a price?
Divide the gross price by (1 + rate). At 20% VAT, $120 ÷ 1.20 = $100 net, so the VAT inside is $20. Do not subtract 20% of the gross price — that gives $96, which is wrong.
What is the UK VAT rate?
The standard rate is 20%. A reduced rate of 5% applies to some items (e.g. home energy), and many essentials are zero-rated (0%).
Is VAT the same as sales tax?
No. Sales tax (US) is charged once, at the point of sale, and varies by state. VAT is charged at every stage of the supply chain, with businesses reclaiming what they paid.
Is this financial advice?
No. This is a planning estimate only, not financial advice.
