How to calculate VAT
To add VAT, multiply the net price by one plus the rate. To take VAT out of a gross price, divide by one plus the rate — never just subtract the percentage.
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The formula
Gross = net × (1 + rate). Net = gross ÷ (1 + rate). VAT = gross − net.
Step by step
- Write the rate as a decimal, so 20% becomes 0.20.
- To add VAT, multiply the net price by 1 plus that decimal.
- To remove VAT, divide the gross price by 1 plus that decimal.
- The VAT itself is the difference between the two prices.
Worked example
A net price of 200 at 20%
- Gross = 200 × 1.20 = 240
- Back the other way: 240 ÷ 1.20 = 200
- VAT = 240 − 200 = 40
The gross price is 240 and the VAT is 40.
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APA
Free Calculator. (n.d.). How to calculate VAT. https://freecalculator.tech/guides/how-to-calculate-vat
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"How to calculate VAT." Free Calculator, https://freecalculator.tech/guides/how-to-calculate-vat.
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How to calculate VAT — Free Calculator, https://freecalculator.tech/guides/how-to-calculate-vat