VAT/GST Calculator

VAT/GST Calculator

Add value-added tax (VAT) or goods and services tax (GST) to a net price, or extract the tax already contained in a gross price. The result shows the net amount, the tax amount, and the gross total for any rate you enter.

VAT and GST formulas

Both taxes work the same way mathematically; the difference is only in naming across countries.

• Adding tax to a net (tax-exclusive) price: tax = net × rate and gross = net × (1 + rate)
• Extracting tax from a gross (tax-inclusive) price: net = gross / (1 + rate) and tax = gross − net

Here rate is the tax rate as a decimal, so a 10% rate is entered as 0.10. The most common mistake is extracting tax by multiplying the gross price by the rate. That overstates the tax, because the rate applies to the net amount, not the gross.

Worked example

Suppose the tax rate is, for example, 10%.

• Adding tax: a net price of 200 gives tax of 200 × 0.10 = 20 and a gross price of 220.
• Extracting tax: a gross price of 220 gives a net price of 220 / 1.10 = 200 and tax of 20.

Note that taking 10% of the gross price directly would give 22, which is wrong: the tax contained in a 10% tax-inclusive price is 1/11 of the gross, not 1/10.

When to use this calculator

• Issuing invoices, when you know your net price and need to show the tax amount and gross total separately.
• Checking a receipt or quote, to confirm how much tax is contained in a tax-inclusive price.
• Setting retail prices, when you want a round gross price and need to work backwards to the net amount you actually keep.
• Preparing tax returns or bookkeeping entries, where sales and purchases must be recorded net of tax.

Practical tips

• Confirm whether a quoted price is tax-inclusive or tax-exclusive before comparing offers; the same headline number can mean very different costs.
• Tax rates differ by country, by region, and often by product category, and reduced or zero rates are common; always use the current official rate that applies to your specific goods or services.
• Registered businesses can usually offset the tax paid on purchases against the tax collected on sales, so the net amount is what matters for pricing decisions.
• Keep the net, tax, and gross figures separate in your records; most tax authorities require them to be shown individually on invoices.
• When chaining calculations, avoid rounding intermediate values; round only the final tax amount, following the rounding rules your tax authority specifies.

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The sales tax calculator handles taxes added at the point of sale, which are typically quoted tax-exclusive. For broader financial planning, the business loan calculator estimates financing costs for a business, the down payment calculator helps plan a property purchase, the mortgage payoff calculator models early repayment, and the coast FIRE calculator looks at long-term savings targets.

Results are estimates based on the rate you enter; confirm current official rates and invoicing rules with your tax authority or a qualified accountant before relying on them.