GST / VAT Calculator

How to use 3 steps

Enter the Amount and pick the Currency.
Set the Tax rate and whether The amount above is net or gross.
Press Calculate to see net, tax and gross.

Amount

Currency

Tax rate (%)

The amount above is

Result

Removing tax divides by 1 + rate rather than subtracting the percentage, which is the common mistake: 20% off a gross 120 is 96, but the correct net figure is 100.

How this tool works

Adds tax to a net price or strips it out of a gross one, at whatever rate you enter, showing the net amount, the tax and the gross together.

Adding tax multiplies; removing it divides. To take 20% out of a gross price you divide by 1.2, because the tax was calculated on the net figure — subtracting 20% from the gross removes too much and produces a net price that will not reconcile. That single asymmetry is the source of most tax arithmetic errors, and showing all three figures at once makes a wrong direction obvious. The rate is entered rather than selected because rates differ by country, by category and over time, and a fixed list would go stale.

Getting the direction right

Removing tax is a division: gross divided by 1.2 gives net at 20%. Subtracting the percentage from the gross is the common error and always understates the net.
Rates depend on what is being sold: most systems have reduced rates and exemptions for food, books, medicine and transport. The rate is a legal question before it is an arithmetic one.
Registration thresholds matter: a business below the threshold does not charge tax and cannot reclaim it, so neither figure applies to them.
Invoices must show tax separately: net, rate, tax and gross. A single total does not allow a customer to reclaim input tax.

Adding tax multiplies; removing it divides

The [msm_tool slug="gst-vat-calculator"] shows net, tax and gross together specifically because the two directions are not mirror images of each other: adding tax to a net price is a multiplication, and taking it back out of a gross price is a division, not a subtraction. Taking 20% out of a gross price means dividing by 1.2, because the original 20% was calculated against the smaller net figure, not the gross one being worked backwards from.

Why subtracting the percentage gives the wrong answer

On a gross price of 120 at a 20% rate, the correct net is 100 and the tax is 20. Subtracting 20% from the gross instead gives 96, because that percentage is being taken from a base six times larger than the one the tax was actually calculated on in the first place. That single mismatch between the base used and the base available is the source of most tax arithmetic errors.

The rate is a legal question before it is an arithmetic one

Most tax systems carry reduced rates and outright exemptions for categories such as food, books, medicine and transport, which is why the rate here is entered rather than picked from a fixed list — a list would inevitably go stale, and which rate genuinely applies to a specific supply is a determination the arithmetic itself cannot make.

A business below the registration threshold sits outside this entirely

A business trading under the applicable threshold does not charge tax on what it sells and cannot reclaim tax on what it buys, so neither the net nor the gross figure produced here actually applies to it — the whole calculation assumes a registered, tax-charging business.

An invoice needs the tax shown separately

A single combined total does not let a customer reclaim input tax; a proper invoice states the net amount, the rate, the tax amount and the gross figure as four distinct lines rather than one number that happens to be correct.

GST and VAT are largely the same idea under different names

Both describe a consumption tax collected in stages along the supply chain, with registered businesses reclaiming what they paid on their own inputs. GST is the term used in India, Australia, Canada and New Zealand; VAT is the term used across the UK, the EU and much of the rest of the world for essentially the same mechanism.

Frequently Asked Questions

Specific to the GST / VAT Calculator. Broader questions about this category are answered on the category page.

How do I remove VAT from a price?

Divide the gross by one plus the rate as a decimal — by 1.2 for 20%, by 1.05 for 5%. The tax is the difference between gross and net. Subtracting the percentage from the gross gives the wrong answer.

Why can I not just subtract the percentage?

Because the percentage was applied to the net price, which is smaller than the gross. Taking that percentage of the larger figure removes more than was added. On a gross of 120 at 20%, the net is 100 and the tax 20; subtracting 20% would leave 96.

What is the difference between GST and VAT?

Mostly terminology. Both are consumption taxes collected in stages along the supply chain, with businesses reclaiming what they pay on inputs. GST is the usual name in India, Australia, Canada and New Zealand; VAT in the UK, the EU and much of the rest of the world.

Which rate should I use?

The one that applies to the specific supply in the specific jurisdiction. Most systems have a standard rate, one or more reduced rates and a set of exemptions, and the boundaries are frequently disputed. Check the tax authority's guidance rather than assuming the standard rate.

Can I use this for a tax return?

The arithmetic is correct and you can rely on it. Which rate applies, and whether a supply is exempt or zero-rated, is a legal question that a calculator cannot answer — and for a return that is the part that matters.