VAT Calculator

Multiply the net by (1 + rate ÷ 100). At 20%: 100 × 1.20 = 120 gross, of which 20 is VAT.

The same formula works for any rate. At 15%: 100 × 1.15 = 115. At 5%: 100 × 1.05 = 105. On an invoice, calculate VAT to the nearest minor unit on each line, then sum to the gross total. Always show net, rate, and VAT separately so the customer can reclaim it cleanly. Treat each rate as a separate sub-total on mixed-rate invoices.

Divide the gross by (1 + rate ÷ 100). At 20%: 120 ÷ 1.20 = 100 net, with 20 of VAT.

At 10%: 110 ÷ 1.10 = 100. To extract only the VAT portion, use gross × rate ÷ (100 + rate). So a 120 gross at 20% gives VAT = 120 × 20 ÷ 120 = 20. The math is reversible — multiplying the recovered net back by (1 + rate/100) should return the original gross. Always confirm with the cross-check.

A shortcut that extracts VAT directly from a gross amount. The fraction equals rate ÷ (100 + rate).

At a 20% rate the fraction is 20/120 = 1/6, so VAT = gross × 1/6. At 10% it is 1/11. At 25% it is 1/5. Multiply any gross by the fraction to get VAT in one step. The remainder is the net. Useful for till-receipt reverse calculations where you only have the total. Always check the fraction matches your jurisdiction's rate before using it on real invoices.

VAT is charged at every stage of supply with input reclaim. Sales tax is charged only at the final consumer sale, with no reclaim.

The end consumer effectively bears the full VAT rate either way, but VAT systems generate a paper trail and reduce evasion. Sales tax is simpler for small retailers but compounds when goods move through multiple intermediaries. The two are not interchangeable — even at the same headline rate, the cash flow and compliance burden are different.

Treat each line separately, then sum the nets and the VATs for the invoice totals.

Line 1: net 200 at 20% gives VAT 40, gross 240. Line 2: net 150 at 5% gives VAT 7.50, gross 157.50. Invoice totals: net 350, VAT 47.50, gross 397.50. Each line on the printed document must show its own rate. Most accounting software also shows a sub-total per rate band beneath the line items — this helps the buyer post input VAT to the correct rate code.

Net is the price before VAT. Gross is the price after VAT. The difference equals the VAT amount.

Business-to-business invoices typically quote in net plus VAT — the buyer reclaims the VAT. Consumer pricing usually shows the gross because that is what the shopper pays. A 100 net at 20% equals 120 gross. Confusing the two on a quote is one of the most common pricing errors. Always confirm in writing whether a price is inclusive or exclusive of VAT before signing.

Yes. Governments adjust rates through budget announcements or emergency measures. Always check the rate in force on the transaction date.

Standard rates can rise, fall, or temporarily switch (a reduced rate for hospitality or energy is a common short-term tool). Reduced and zero-rated category lists also shift. The rate that applies to a transaction is the one in force on the tax point — usually the invoice date or the date of supply, whichever is earlier. Update accounting software and invoice templates the moment a new rate takes effect.

Governments reduce VAT on goods considered necessities or socially important — staple food, books, children's items, energy, medicines.

The aim is to lower the cost burden on lower-income households, since indirect tax hits a larger share of their spending. Zero-rated categories go further by allowing the seller to reclaim input VAT while charging the customer nothing — fully relieving the price. Reduced and zero-rated category lists are detailed in the local tax authority's published notices and change between budgets.

A registered business deducts input VAT (on purchases) from output VAT (on sales), and pays the net to the tax authority.

If input VAT exceeds output VAT, the business is in refund position. To reclaim, the buyer needs a valid VAT invoice from the supplier showing the supplier's VAT number, the rate, and the VAT amount. Reclaims must relate to taxable business activity, not personal expenditure. Most tax authorities run periodic compliance checks and may request original invoices for any claim above a threshold.

Reverse charge shifts VAT accounting from the supplier to the customer. The supplier issues an invoice with no VAT; the customer accounts for both output and input VAT.

If the input VAT is fully reclaimable, the entries are cash-neutral. The mechanism is common on cross-border business-to-business services and on certain domestic supplies prone to fraud, such as construction services, telecoms wholesale, and precious metals. The invoice must clearly state that reverse charge applies and that the customer is responsible for the VAT.

A full VAT invoice shows a unique invoice number, date, supplier VAT number, line items with rates, and totals for net, VAT, and gross.

Mixed-rate supplies need each rate broken out separately. Without these fields the buyer cannot reclaim the VAT and the document may be challenged in a tax audit. Most accounting software produces compliant invoices by default; PDF templates often miss required fields like the supplier VAT number or rate breakdown.

Adding VAT: gross = net × (1 + rate/100). Removing VAT: net = gross ÷ (1 + rate/100). VAT = gross − net.

Equivalently, VAT = gross × rate ÷ (100 + rate). The two operations are inverses — running one then the other returns the original number. Always round at the final step, not after each intermediate division, to avoid drift on long invoices. Calculator software handles this internally using integer minor-unit math, then formats the display value.

Use the VAT fraction. At 20% multiply the gross by 1/6. At 10% use 1/11. At 25% use 1/5.

For any rate, the fraction equals rate ÷ (100 + rate). At an 18% rate the fraction is 18/118 ≈ 0.1525. A 1,180 gross at 18% gives VAT of 180 and a net of 1,000. Confirm by multiplying 1,000 × 1.18 — the answer should match the original gross. If it doesn't, the wrong rate or fraction was applied.

Yes, on supplies that the tax law defines as zero-rated. Zero-rated is not the same as exempt.

A zero-rated supply is still taxable — the rate is just 0% — and the seller can still reclaim input VAT on related purchases. An exempt supply sits outside VAT entirely, with no input reclaim. Common zero-rated categories include staple food, books, children's clothing, prescription medicines, and exported goods. Always confirm the specific category in the local tax authority's published guidance before issuing a zero-rated invoice.

Round VAT to the nearest minor unit (cent, paisa, agora) on each line. Be consistent within a document.

Most jurisdictions accept either line-level rounding or invoice-level rounding, but mixing the two on the same document causes audit issues. Compound rounding errors on long invoices can leave the printed total a unit off the calculated sum — always rebuild the gross from the rounded net plus rounded VAT, not the other way around. Accounting software handles this automatically and produces audit-safe figures.