VAT / Sales Tax Calculator

How VAT and sales tax math works

Both VAT and sales tax are a percentage added on top of a net price. The calculator works in two directions: add tax to a net amount to get the gross price, or remove tax from a gross amount to recover the pre-tax price — a common need for invoices and expense reports.

Formulas

Gross = net × (1 + rate ÷ 100)

Net = gross ÷ (1 + rate ÷ 100)

Tax amount = gross − net

Worked examples

• Add 20% VAT to $100 — 100 × 1.20 = $120 gross; the tax is $20.
• Remove 20% VAT from $120 — 120 ÷ 1.20 = $100 net. Subtracting 20% of 120 would give $96, which is wrong — the tax was charged on the net, not the gross.
• Add 8.875% sales tax to $50 — 50 × 1.08875 = $54.44.

VAT vs. sales tax

Both add a percentage to a price, but they are collected differently. Sales tax (common in the US) is added once, at the final sale to the consumer, and shown on top of the shelf price. VAT (used across the EU, UK, and much of the world) is charged at every stage of production, with businesses reclaiming what they paid, and is usually already included in the displayed price. The arithmetic in this calculator is the same for either — what differs is whether the rate is added at checkout or baked into the ticket price.

Tax-inclusive vs. tax-exclusive prices

This is where the "remove tax" direction matters. If a receipt shows a gross, tax-inclusive total and you need the net figure for an expense claim, divide by 1 + rate — do not subtract the rate from the gross, which overstates the tax. For example, stripping 20% VAT from £120 gives £100 net and £20 tax, not £96.

The quantity field multiplies the amount first, which is handy for line items. For discounts combined with tax, see the discount calculator.

Reverse VAT calculator: remove tax from a gross total

A reverse VAT calculation finds the net price hidden inside a tax-inclusive amount. Divide the gross price by 1 plus the tax rate as a decimal. For a gross invoice total of 1,250 at 25% VAT, net is 1,250 ÷ 1.25 = 1,000 and VAT is 250. The VAT portion of a gross price is not simply gross × 25%, because the rate was originally applied to the smaller net amount.

Add sales tax to a purchase

To calculate a price after sales tax, multiply the pre-tax subtotal by 1 plus the combined rate. A $79.95 purchase at 8.25% becomes $79.95 × 1.0825 = $86.55 after rounding to cents, with $6.60 tax. In jurisdictions with state, county, and city components, enter the combined rate that applies to the transaction. Rates and taxable items differ by location, so the calculator does not automatically select a local rate.

Tax-inclusive and tax-exclusive invoice totals

“Tax exclusive” means the entered or displayed amount is net and tax must be added. “Tax inclusive” means tax is already part of the gross amount and must be extracted for a net/tax breakdown. Quotes, receipts, online stores, and expense reports may label these values as subtotal, before tax, excluding VAT, including VAT, gross, or total. Choose the calculator direction based on what the entered amount represents, not merely the document label.

VAT calculation for multiple items

Quantity multiplies the entered unit amount before tax is added or removed. Ten net items at $24.50 each produce a $245 subtotal. At 20% tax, the tax is $49 and the gross line total is $294. Depending on local rules and software, an invoice may round tax per line or on the final subtotal, which can create a one-cent difference on large orders or fractional unit prices.

VAT rates across Europe

There is no single VAT rate, which is why the calculator accepts any percentage. Standard rates as of January 2026, from Tax Foundation, VAT Rates in Europe; checked 17 September 2026.

* Not an EU member state.

Across the 27 EU members the standard rate runs from 17.0% in Luxembourg to 27.0% in Hungary, averaging 21.9% unweighted. The floor is not a coincidence: EU rules forbid a standard rate below 15%, so the range is bounded from underneath in a way US sales tax never is. Outside the EU the picture opens up — Switzerland charges 8.1%, the lowest in Europe and less than half the EU minimum.

Reduced rates are where the real complexity lives. Most countries run two or three, applied by product category rather than by buyer, and the categories do not match across borders — the same e-book can be standard-rated in one member state and reduced in its neighbour. 6 countries also keep a super-reduced rate below 5%, some of them very low indeed: France 2.1%, Ireland 4.8%, Italy 4%, Luxembourg 3%, Spain 4% and Turkey 1%.

The last column is the one almost nobody explains. A parking rate is a historical carve-out: when the EU harmonised VAT, a few states were applying reduced rates to goods that did not make the agreed reduced list, and rather than force an immediate jump to the standard rate they were allowed to park those goods at an intermediate rate of at least 12%. 6 countries still use one — Austria 13.0%, Belgium 12.0%, Ireland 13.5%, Luxembourg 14.0%, Malta 12.0% and Portugal 13.0% — and it exists purely because of where the rules stood in 1991.

Whatever the rate, use the current one for the relevant place, date, product and transaction type. Rates change by legislation and the category a product falls into is decided by the tax authority, not by the seller.

The sales tax formula

Adding tax is a single multiplication; removing it is a division, and that asymmetry is where most manual errors happen. Subtracting the tax percentage from a gross total does not give the net price.

gross = net × (1 + rate) · net = gross ÷ (1 + rate) · tax = gross − net

On a $108 total at 8% tax, the net price is 108 ÷ 1.08 = $100 and the tax is $8. Taking 8% off $108 would give $99.36 — close enough to look right, and wrong on every invoice.

Why US sales tax depends on the exact address

In the US there is no national sales tax. The rate you pay is a stack of separate jurisdictions, which is why two shops on opposite sides of one street can charge different amounts:

combined rate = state + county + city + special district

Special districts fund things like transit authorities and stadium bonds, and their boundaries follow neither city nor county lines. That is why sales tax is looked up by address or ZIP+4 rather than by city name — and why a rate you find for "Austin" may not apply three blocks away.

US state rates

US rates are a separate problem from VAT, and a bigger table than belongs here: 45 states and the District of Columbia levy a sales tax, and the combined rate that reaches a till is the state portion plus whatever counties, cities and special districts add. The full breakdown — state rate, average local rate and combined rate for every state, with what changed this year — is in sales tax by state.

The short version for using this calculator: enter the combined rate for the address, not the state rate. Colorado's state rate is 2.90% and the average Colorado purchase meets 7.89%, so the state figure would understate the tax by more than it accounts for.

States with no sales tax, and Hawaii's exception

Five states levy no statewide sales tax: Delaware, Montana, New Hampshire, Oregon, and Alaska — though Alaskan boroughs and cities may charge their own, so "no sales tax" is only true at the state level there.

Hawaii is not a sales tax state either, despite looking like one. It charges a General Excise Tax on a business's gross receipts, at 4% statewide with a county surcharge that brings Oahu to 4.5%. The legal difference matters: GET is a tax on the seller that is commonly passed on to the customer, so the visible rate can exceed the headline figure once it is added to the price and taxed itself.

Canada: GST, PST, and HST

Canada stacks a 5% federal GST with provincial tax, and the combination differs by province:

Where GST and PST are charged separately, they both apply to the pre-tax price — one is not calculated on top of the other. Quebec has worked this way since 2013.

What this tax calculator does not determine

It performs arithmetic but does not decide tax nexus, place of supply, exemptions, registration thresholds, input-tax credits, or filing obligations. Those rules vary and can change. For bookkeeping or tax returns, verify the applicable rate and rounding method with official guidance or a tax professional. After finding a tax-inclusive price, the profit margin calculator can help evaluate pricing, but sales tax collected from a customer is generally not business revenue.