VAT Calculator
Modify the values and click calculate
Price Details
Gross Price
Enter a price and VAT rate to see the full breakdown.
Understanding Value Added Tax
Value Added Tax (VAT) is a multi-stage consumption tax, standard across the UK, EU, and most of the world outside the US. Unlike US sales tax, which is added once at the register on top of a pre-tax price, VAT is collected incrementally at every stage of production and distribution -- and critically, it's already baked into the price you see on the shelf. That's the entire reason this is a separate tool from our Sales Tax Calculator.
Collected in Stages
VAT is charged at every step of the supply chain -- manufacturer to wholesaler, wholesaler to retailer, retailer to consumer -- with each business reclaiming the VAT it paid on its own inputs, so only the "value added" at each step is ultimately taxed.
Already in the Listed Price
The sticker price you see is the VAT-inclusive (gross) price -- there's no separate tax line added at checkout the way there is with US sales tax.
Net vs. Gross
The "net" price is before VAT; the "gross" price is after VAT (what's actually on the shelf). Going from gross back to net means dividing by (1 + VAT rate), not simply subtracting the rate as a percent of the gross.
Standard Rates Vary by Country
The UK's standard VAT rate is 20%, used as this calculator's default. Other countries set their own standard and reduced rates -- always confirm the rate that applies to your goods and jurisdiction.
Worked Example
Adding VAT to a net price: a $100 net price at the standard 20% VAT rate:
- VAT amount: $100 × 0.20 = $20.00.
- Gross price: $100 + $20.00 = $120.00.
Backing out the net price from a gross (VAT-inclusive) price: if the shelf price is $120.00 at the same 20% rate:
- Net price: $120.00 ÷ 1.20 = $100.00.
- VAT amount: $120.00 − $100.00 = $20.00.
$100 Net at 20% VAT
- Net Price: $100.00
- VAT Amount: $20.00
- Gross Price: $120.00
VAT vs. US Sales Tax
The math for adding or removing a percentage looks similar between VAT and US sales tax, but the real-world context is very different. VAT is embedded in the price at every stage of production and shown to consumers as a single, already-included figure. US sales tax is only ever applied once, at the final retail sale, and is always added visibly on top of a pre-tax subtotal. If you're working with a US point-of-sale price instead, use our dedicated Sales Tax Calculator, which frames the math for that context and uses a typical single-digit US rate as its default rather than this tool's 20% VAT-style default.
Key Takeaways
- VAT Is Already Included: Unlike US sales tax, the price you see on the shelf already has VAT baked in -- there's no separate line added at checkout.
- Multi-Stage, Not Single-Stage: VAT is collected incrementally across the whole supply chain, with businesses reclaiming the VAT on their own purchases along the way.
- Divide to Go from Gross to Net: Recover the net price from a gross price by dividing by (1 + VAT rate) -- don't subtract the rate as a percent of the gross figure.
- Not the Same as Sales Tax: If you're pricing goods for the US point-of-sale market, use the dedicated Sales Tax Calculator -- the tax is collected differently and typically at a different rate.