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VAT and sales tax calculator: add or remove tax from a price

Add VAT or sales tax to a net price, or work back from a gross price to the net amount and the tax included, using the UK rates or any US state rate.

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Gross price (tax included)

£300.00

Net price (before tax)

£250.00

Tax amount

£50.00

Net to gross multiplier
1.2000
Tax as a share of the gross price
16.67%

The same amount at common tax rates

Net price (before tax)Tax amountGross price (tax included)
0% current£250.00£0.00£250.00
5% current£250.00£12.50£262.50
7.25% current£250.00£18.13£268.13
8.88% current£250.00£22.19£272.19
10% current£250.00£25.00£275.00
20% current£250.00£50.00£300.00

Add or remove tax in one step

Invoices, quotes, trade price lists and receipts move constantly between net (before tax) and gross (tax included) amounts. This calculator works both ways. Enter the price you know, set the VAT or sales tax rate, and get the net price, the tax amount and the gross total instantly. Prices are shown in pounds by default because VAT is mainly a UK and European tax, but the maths is identical for US sales tax in dollars.

The formulas

Net to gross: Gross = Net × (1 + rate)

Gross to net: Net = Gross ÷ (1 + rate)

Tax = Gross − Net

The multiplier is 1.20 for the UK standard rate, 1.05 for the reduced rate and 1.08875 for a combined 8.875% sales tax.

Worked example: a £250 invoice

  1. Standard UK VAT: 20%, multiplier 1.2.
  2. Gross: 250 × 1.2 = £300.
  3. VAT: 300 − 250 = £50.
  4. Back to net: 300 ÷ 1.2 = £250.

A common mistake is to take 20% off the gross price: 20% of £300 is £60, which would give £240. Because VAT is charged on the net price, you have to divide by 1.2 to remove it.

UK VAT rates

Rate Examples £250 net becomes
20% standard most goods and services £300.00
5% reduced domestic energy, children’s car seats, some energy-saving materials £262.50
0% zero rate most food, books and newspapers, children’s clothes £250.00

Exempt supplies such as insurance, most financial services and education carry no VAT either, but unlike zero-rated supplies they do not let the business reclaim input VAT.

US sales tax

There is no federal sales tax in the US. States set a base rate and counties and cities add their own, so the total depends on where the buyer takes delivery. Five states (Alaska, Delaware, Montana, New Hampshire and Oregon) have no statewide sales tax. Shelf prices usually exclude tax, so use the net-to-gross mode to see what you will pay at the register.

Combined rate Example location $100 before tax
7.25% California base rate $107.25
8.875% New York City $108.88
10% some cities in Washington or Illinois $110.00

Quick mental maths

At 20%, VAT is one sixth of the gross price: divide a VAT-inclusive total by 6 to estimate the VAT. At 5%, it is one twenty-first. If you are VAT-registered and reclaim input tax, compare supplier quotes on their net prices; if you are a consumer, compare gross prices.

Frequently asked questions

How do I add 20% VAT to a price?

Multiply the net price by 1.2. A £250 net invoice becomes £300 including VAT, of which £50 is VAT. For the 5% reduced rate, multiply by 1.05.

How do I remove VAT from a price?

Divide the gross price by 1 plus the rate. £300 including 20% VAT is £300 ÷ 1.2 = £250 net. Taking 20% off £300 gives £240, which is wrong, because the VAT was calculated on the net price, not on the gross.

What fraction of a VAT-inclusive price is VAT?

At 20%, VAT is exactly one sixth of the gross price (16.67%). At 5% it is one twenty-first (about 4.76%). HMRC calls this the VAT fraction and it is handy for quick checks on receipts.

How is US sales tax different from VAT?

US sales tax is charged only once, at the final sale to the consumer, and is usually added at the till rather than included in the shelf price. Rates are set by states, counties and cities, so the combined rate depends on the delivery address. VAT is charged at every stage of production and businesses reclaim what they paid.

When must a UK business register for VAT?

A UK business must register once its VAT-taxable turnover over the previous 12 months exceeds the registration threshold, set at £90,000 since April 2024. Businesses below the threshold can register voluntarily, which lets them reclaim VAT on purchases.

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Results are estimates provided for information purposes. They do not replace professional advice.

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