Sales Tax Calculator
Add tax to a net price or work backwards from a gross price to find the amount before tax, with the tax portion shown separately.
How it works
Adding tax multiplies the net price by one plus the rate. Removing it divides the gross price by the same figure — and dividing is the step people skip, which is why reverse VAT is so often wrong.
Taking 20% off a tax-inclusive price does not give the net amount. A 120 gross at 20% VAT is 100 net, because the tax was calculated on the 100, not the 120. Subtracting 20% of 120 gives 96, which is out by four.
Whether prices are quoted inclusive or exclusive of tax varies by country and by whether the customer is a business or a consumer. Check which one a quote uses before comparing two of them.
The formula
Add tax
gross = net × (1 + rate ÷ 100)
Remove tax
net = gross ÷ (1 + rate ÷ 100)
Tax amount from gross
tax = gross − (gross ÷ (1 + rate ÷ 100))
Worked examples
| Scenario | Working | Result |
|---|---|---|
| 100 net with 20% VAT | 100 × 1.2 | 120 gross, 20 tax |
| 120 gross, removing 20% VAT | 120 ÷ 1.2 | 100 net, 20 tax |
| Subtracting 20% from 120 instead | 120 × 0.8 | 96 — the common mistake |
When you'd use it
- Adding VAT or GST to an invoice
- Finding the net amount in a tax-inclusive price
- Checking a receipt's tax line
- Quoting a business price excluding tax
Common questions
Why can't I just subtract the percentage to remove tax?
Because the tax was a percentage of the smaller net figure, not of the gross. Removing 20% VAT means dividing by 1.2, not multiplying by 0.8 — the two differ by 4% of the price, which adds up quickly on invoices.
What rate should I use?
Whatever applies where the sale takes place, which can depend on the product category as well as the country or state. This tool does not know your jurisdiction — enter the rate that applies to you.
Is VAT the same as sales tax?
Not structurally. VAT and GST are charged at each stage with credit for tax already paid; US-style sales tax is charged once at the final sale. For a single consumer transaction the arithmetic here is the same.