VAT Calculator
Value Added Tax (VAT) is a consumption tax charged on most goods and services in the UK, EU and many other countries. Receipt Caker's free VAT calculator adds VAT to a net price or strips VAT out of a gross price, showing the net, VAT, and gross figures at once.
- How do I calculate VAT?
- Receipt Caker adds VAT by multiplying the net price by the rate: VAT = net × (rate ÷ 100), gross = net + VAT. To remove VAT from a gross price, divide by one plus the rate. Enter your amount and rate and both directions are shown instantly.
- Net
- 100.00
- VAT
- 20.00
- Gross
- 120.00
Adding VAT to a net price
To add VAT, multiply the net (VAT-exclusive) price by the rate as a decimal and add it back: gross = net × (1 + rate ÷ 100). At a standard 20% rate, a £100 net price gains £20 of VAT for a £120 gross price; at a reduced 5% rate the same £100 becomes £105. Only the rate changes from one jurisdiction to the next — the method is identical everywhere VAT applies.
Receipt Caker takes your net figure and rate and reports the VAT amount and the gross total side by side, which is exactly what you need to quote a customer an inclusive price or fill in the VAT line on an invoice.
Removing VAT from a gross price
To strip VAT out of a VAT-inclusive total, divide the gross amount by one plus the rate as a decimal: net = gross ÷ (1 + rate ÷ 100). For a £120 gross price at 20%, the net is 120 ÷ 1.20 = £100 and the VAT element is £20. Simply taking 20% off the £120 gives the wrong answer, because the 20% was originally added to the smaller net figure, not the larger gross one.
This reverse calculation matters when you reclaim input VAT or need to break the tax out of a receipt that only shows the final amount. Switch the tool to remove-VAT mode and it separates the net and the VAT for you automatically.
VAT versus sales tax: what's different
VAT and US-style sales tax both raise the price a consumer pays, but they are collected differently. Sales tax is charged once, at the final retail sale, and shows up as a single line at checkout. VAT is charged at each stage of the supply chain, with businesses reclaiming the VAT they paid on inputs, so only the value added at each step is effectively taxed — though the shopper still sees a single inclusive price.
For everyday consumer math the arithmetic looks similar, which is why Receipt Caker offers both a VAT calculator and a sales tax calculator. Use this one for inclusive VAT pricing common in the UK and EU, and the sales tax tool when tax is added on top at the register.
Common VAT rates around the world
VAT rates depend on the country and the type of goods. The UK uses a 20% standard rate, a 5% reduced rate for items such as domestic energy, and a zero rate for most food and children's clothing. EU member states set their own standard rates, generally between 17% and 27%, usually alongside one or more reduced rates for essentials.
Because rates change over time and hinge on the product category, always confirm the applicable figure for your jurisdiction before filing anything official. For sample invoices and receipts, this calculator accepts any rate you enter, so you can model 20%, 23%, or any local figure without hunting for a preset.