VAT Calculator
Add VAT or take it out of a gross price. Taking 20 percent off a gross price is the wrong sum, and this shows the fraction that is right.
VAT rate 20%
Amount entered £120.00 (includes VAT)
Net £100.00
VAT £20.00
Gross £120.00
VAT fraction of gross 1/6
To take VAT out of a gross price, divide by 1.20 rather than taking 20%
off. Taking the rate off a gross price understates the net every time;
at 20% the VAT is 1/6 of the gross.
VAT collected is never revenue. It is held for the tax authority, and
input VAT on what you buy is deducted from it before you pay.
Output is valid and updates as you type.
Fix the highlighted fields to update the output.
The reverse VAT calculation is the one people get wrong. A 120 gross price at 20 percent VAT is 100 net and 20 VAT. Taking 20 percent off 120 gives 96, which is wrong by 4, and wrong in the same direction on every invoice.
The right sum is a division: gross divided by 1.20. Or, if you prefer fractions, the VAT in a 20 percent gross price is one sixth of it. This tool prints that fraction so you can check the arithmetic by eye.
How to use
- Put in the amount.
- Leave This amount includes VAT ticked if it is a gross price, which is the usual case when you are working backwards from a receipt.
- Set the rate. 20 in the UK, 19 in Germany, 21 in the Netherlands, 7.7 in Switzerland, 0 for zero-rated goods.
Example
VAT rate 20%
Amount entered £120.00 (includes VAT)
Net £100.00
VAT £20.00
Gross £120.00
VAT fraction of gross 1/6The fraction is worth memorising for the rate you work with. At 20 percent the VAT is a sixth of the gross. At 5 percent it is a twenty-first. At 17.5 percent, which the UK used until 2011 and which still turns up in old records, it was seven forty-sevenths.
Pitfalls
Do not take the rate off a gross price. Divide by 1 plus the rate. This is the single most common VAT error and it always understates the net.
VAT is never your money. Output VAT is collected for the tax authority and input VAT on your purchases is deducted from it. Neither belongs in revenue or in any margin figure.
Zero-rated and exempt are different. Zero-rated sales carry VAT at 0 percent and you can still reclaim input VAT on them. Exempt sales are outside the system and you generally cannot. The arithmetic is the same; the reclaim is not.
Reverse charge changes who accounts for it. For many cross-border business services, the customer accounts for the VAT rather than the supplier. The invoice shows no VAT and says so. That is a rule about who pays, not a different calculation.
Rounding is per invoice. Work the VAT out on the total. Rounding per line and summing produces a figure that differs by pennies from what the authority expects.
Compatibility
Arithmetic in the browser: nothing is uploaded, nothing is stored, and the share link carries the figures.
Rates are a field rather than a country list, because rates change and lists go stale. The tool accepts one decimal place, which covers Switzerland’s 7.7 and the reduced rates that use halves.
The fraction is shown for the rates that have a well-known one. For any other rate the division is the reliable method.