How do I find the net price from a VAT-inclusive total?

Divide the gross price by (1 + VAT rate as a decimal). For a 20% rate: net = gross ÷ 1.20.

Is VAT the same as sales tax?

They serve a similar purpose but work differently — VAT is collected at each stage of production, while US-style sales tax is collected once at the final sale. For a rate applied to a single purchase, the math here works the same either way.

VAT Calculator

Calculate Value Added Tax (VAT) — add VAT to a net price, or back it out of a VAT-inclusive price.

Mode

Net price

VAT rate

VAT Amount

$20.00

Gross Price

$120.00

How It Works

Adding VAT

VAT amount = net price × VAT rate. The gross (VAT-inclusive) price is the net price plus that VAT amount.

Removing VAT from a gross price

Since many prices are displayed VAT-inclusive, the net price is found by dividing the gross price by (1 + VAT rate) — not by simply subtracting the percentage.

Example Calculation

A £100 net price with 20% VAT has £20 of VAT, for a £120 gross price.

Common Mistakes

Subtracting the VAT percentage directly from a gross price instead of dividing by (1 + rate) — this always slightly understates the true net price.
Using the wrong VAT rate — many countries have multiple rates (standard, reduced, zero-rated) depending on the type of good or service.

Frequently Asked Questions

How do I find the net price from a VAT-inclusive total?: Divide the gross price by (1 + VAT rate as a decimal). For a 20% rate: net = gross ÷ 1.20.
Is VAT the same as sales tax?: They serve a similar purpose but work differently — VAT is collected at each stage of production, while US-style sales tax is collected once at the final sale. For a rate applied to a single purchase, the math here works the same either way.