VAT formula: calculate net price, gross price and VAT
To add VAT, multiply the net price by 1 + VAT rate ÷ 100. To remove VAT, divide the gross price by the same factor. At 20%, the factor is 1.20: a net price of 100.00 becomes 120.00 including VAT.
Try the formula: add 20% VAT to 100
The three VAT formulas
| What you need | Formula | Example at 20% |
|---|---|---|
| VAT amount from net | VAT = net × rate ÷ 100 | 100 × 20 ÷ 100 = 20 |
| Gross price from net | Gross = net × (1 + rate ÷ 100) | 100 × 1.20 = 120 |
| Net price from gross | Net = gross ÷ (1 + rate ÷ 100) | 120 ÷ 1.20 = 100 |
| VAT amount from gross | VAT = gross − net | 120 − 100 = 20 |
Net means before VAT. Gross means including VAT. Enter the rate as a percentage: 20 means 20%, not 0.20. These formulas assume VAT is calculated as a percentage of the net price.
How to add VAT: a worked example
A net price of 250.00 at 20% gives 250 × 0.20 = 50.00 VAT. Add that to the net price: 250 + 50 = 300.00 gross. The shortcut is 250 × 1.20.
How to remove VAT from a VAT-inclusive price
For 120.00 including 20% VAT, calculate 120 ÷ 1.20 = 100.00 net. Then subtract: 120 − 100 = 20.00 VAT.
Do not subtract 20% of the gross amount. That would subtract 24.00 and leave 96.00, because the percentage was applied to the wrong starting price.
Find the VAT amount without calculating net first
Use VAT = gross × rate ÷ (100 + rate). For a gross price of 120.00 at 20%, this is 120 × 20 ÷ 120 = 20.00. At 22%, the denominator becomes 122.
Use a different VAT rate
| VAT rate | VAT amount | Gross price | Open example |
|---|---|---|---|
| 5% | 5.00 | 105.00 | Calculate at 5% |
| 19% | 19.00 | 119.00 | Calculate at 19% |
| 20% | 20.00 | 120.00 | Calculate at 20% |
| 22% | 22.00 | 122.00 | Calculate at 22% |
Rounding and invoices
Keep the rate and intermediate division accurate, then round the monetary result to the currency precision. This calculator displays two decimal places. For an invoice with several lines, the invoice tool rounds each line before adding the totals; a system that rounds only after grouping may differ by a cent.
For several VAT rates, calculate each line or rate group separately. See complete invoice examples or open the invoice calculator.
Frequently asked questions
How do I calculate VAT in Excel or Google Sheets?
If A2 contains the net price and B2 contains the number 20, use =A2*(1+B2/100) for gross. If B2 is formatted as a percentage and contains 20%, use =A2*(1+B2). To get net from gross, replace multiplication with division.
Can I use one formula for an invoice with mixed rates?
Each rate needs its own calculation. Applying one rate to the entire invoice changes the result when some lines use a different rate.