VAT (value-added tax) is a percentage added to most goods and services. The two everyday tasks are adding VAT to a net price and pulling it back out of a gross one. Here are both, the simple formulas, and a free calculator.
Add or remove VAT free →Adding VAT
To add VAT, multiply the net amount by the rate and add it back: gross = net × (1 + rate). At 20%, a net of 100 becomes a gross of 120, and the VAT is 20.
Removing VAT
To find the net inside a VAT-inclusive (gross) price, divide by 1 + rate: net = gross ÷ (1 + rate). At 20%, a gross of 120 gives a net of 100 and VAT of 20. Dividing by 1.2 is the step people forget.
Common VAT rates
Rates vary by country — 20% in the UK, 19% in Germany, 12% in Kyrgyzstan — with reduced rates for some goods. Always use the rate that applies where you trade; the maths is identical.
Net, VAT and gross
Net is the price before tax, VAT is the tax itself, and gross is what the customer pays. An invoice usually shows all three so both sides can see the breakdown.
When you charge VAT
You generally charge VAT only if you're registered for it. If you're not registered you don't add VAT — check the threshold and rules where you operate before deciding.
Frequently asked questions
How do I remove VAT from a price?+
Divide the VAT-inclusive (gross) price by 1 + the rate. At 20%, net = gross ÷ 1.2, and the VAT is the difference.
How do I add VAT?+
Multiply the net price by 1 + the rate. At 20%, gross = net × 1.2, and the VAT is net × 0.2.
What VAT rate should I use?+
The standard rate where you sell — for example 20%, 19% or 12%. Enter any rate in the calculator; the formula is the same.
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