How to add or remove VAT
Example: adding 20% UK VAT to £100 gives £100 × 1.20 = £120. To take VAT out of a £120 receipt, divide by 1.20 to get £100 net; the VAT is £20.
A common mistake is to take 20% off the gross price: £120 − 20% is £96, not £100. Because VAT is added on top of the net price, the VAT inside a total is 1/6 of it at 20%, 1/11 at 10% and 3/23 at 15%.
VAT and GST rates
The rates listed are the standard rates. Many countries also have reduced rates for food, books, children's clothing or energy, and some goods are zero-rated or exempt. Canada's 5% GST is combined with a provincial tax in some provinces, as a single HST (13% in Ontario, 15% in the Atlantic provinces) or a separate PST. The U.S. has no VAT; for U.S. purchases use the sales tax calculator.
Rates change from time to time, so check your country's tax authority before filing a return. Pick "Other rate" for any rate not listed.
Frequently asked questions
How do I calculate VAT from a total?
Divide the total by 1 plus the rate to get the net price, then subtract. At 20%, £240 ÷ 1.2 = £200 net, so the VAT is £40.
How do I add 20% VAT?
Multiply the net price by 1.2. £50 becomes £60.
What is the difference between VAT and GST?
They work the same way: a tax added at each stage of sale and paid by the final buyer. Countries such as Canada, Australia, New Zealand and India call it GST (goods and services tax).
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