What is the difference between VAT and sales tax?

VAT is collected at every stage of production with credits for tax already paid, and is usually shown included in the displayed price. U.S. sales tax is charged only at final sale and typically added at checkout. For U.S. sales tax, use the sales tax calculator instead.

VAT Calculator

Q: How do I add VAT to a price?

Multiply the net price by (1 + VAT rate). At 20% VAT, a £100 net price becomes 100 × 1.20 = £120 gross, of which £20 is VAT.

Q: How do I remove VAT from a gross price?

Divide the gross price by (1 + VAT rate). A £120 gross price at 20% VAT is 120 ÷ 1.20 = £100 net, so the VAT portion is £20. A common shortcut for 20% VAT is to divide the gross by 6 to get the VAT.

Add value-added tax to a net price, or strip the VAT out of a gross price to see the tax-free amount.

Gross price (with VAT)

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Net price

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VAT amount

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Gross price

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The VAT formulas

Add VAT: Gross = Net × (1 + rate)
Remove VAT: Net = Gross ÷ (1 + rate) · VAT = Gross − Net

Worked example (20% VAT)

Net 100 → Gross = 100 × 1.20 = 120, VAT = 20.

Reverse: Gross 120 → Net = 120 ÷ 1.20 = 100. Shortcut for 20% VAT: divide the gross by 6 to get the VAT (120 ÷ 6 = 20).

Standard VAT rates by country

Country	Standard VAT
United Kingdom	20%
Germany	19%
France	20%
Ireland	23%
Australia (GST)	10%
United States	No VAT (sales tax)

Many countries apply reduced rates to essentials like food, books, and children's items. The U.S. has no VAT — it uses sales tax instead. For retail markups and margins on VAT-inclusive prices, see the margin and markup calculators.

Frequently asked questions

How do I add VAT to a price?

Net × (1 + rate). At 20%, £100 → £120 (£20 VAT).

How do I remove VAT from a gross price?

Gross ÷ (1 + rate). £120 ÷ 1.20 = £100 net. For 20% VAT, divide gross by 6 for the VAT.

VAT vs. sales tax?

VAT is charged at each production stage and shown included; U.S. sales tax is added only at final checkout.

Related calculators

Note: Uses a single rate; reduced and zero rates apply to some goods. Not tax advice. Last reviewed: July 2026.