VAT Calculator
This is part of the free tax calculator collection here. If you're looking for the US sales tax version, the reverse sales tax calculator on the homepage handles that. This page is for VAT — the tax system used in the UK, EU, and most of the rest of the world.
VAT works differently from American sales tax in a few important ways, but the core question people bring to this page is usually straightforward: either you have a net price and need to know the gross after VAT, or you have a gross price and need to strip the VAT out. The calculator below handles both directions. Pick a country from the dropdown or enter a custom rate if yours isn't listed, and you'll have the breakdown in a moment.
VAT vs US Sales Tax — What's the Difference?
If you have spent any time shopping in both the US and Europe, you have probably noticed the pricing feels different even before you look at the numbers. In the UK and across the EU, VAT is baked into the price on the shelf. A tag that reads 100 means you hand over 100 at the register. The tax is already inside that figure. In the US, the sticker says $100 but the register says $108 — because sales tax gets added at the point of sale, not before.
The structural difference goes deeper than shelf labels, though. VAT is collected at every stage of production and distribution, which is where the name comes from. A factory buys raw materials and pays VAT on them. It turns those materials into a product and charges VAT when selling to a wholesaler. The wholesaler charges VAT when selling to a retailer. At each step, the business claims back the VAT it paid on inputs and remits only the difference to the tax authority. US sales tax, by contrast, is a single-stage tax — it only applies at the final sale to the end consumer.
For anyone just trying to figure out the pre-tax cost of something they bought, the practical math is identical either way. You divide the total by one plus the tax rate expressed as a decimal. A 120 item with 20% VAT: 120 divided by 1.20 equals 100. The collection mechanics matter to businesses and governments, but for extracting the tax portion from a receipt, the formula does not change.
Common VAT Rates by Country
VAT rates vary considerably from one country to the next, and most countries maintain at least two tiers: a standard rate for general goods and services, and one or more reduced rates for essentials like food, medicine, or children's clothing. The table below covers the countries people ask about most often.
| Country | Standard Rate | Reduced Rate |
|---|---|---|
| United Kingdom | 20% | 5% |
| Germany | 19% | 7% |
| France | 20% | 5.5% |
| Spain | 21% | 10% |
| Italy | 22% | 5% |
| Netherlands | 21% | 9% |
| Australia (GST) | 10% | — |
| Canada (GST/HST) | 5–15% | — |
Keep in mind that several EU countries also have super-reduced or zero rates for specific categories. The UK, for instance, zero-rates most food and children's clothing. If you are dealing with a product that falls into one of those categories, the standard rate will not apply and you should use the custom rate field in the calculator above.
How to Remove VAT from a Price
The formula is straightforward: divide the VAT-inclusive price by (1 + the VAT rate as a decimal). That gives you the net price. Subtract the net from the gross to find the VAT portion.
Here is a worked example. A laptop costs 599 including VAT at 20%. To find the net price, divide 599 by 1.20. That gives you 499.17. The VAT portion is 599 minus 499.17, which equals 99.83. So out of that 599, the shop keeps 499.17 and the government gets 99.83.
The mistake people sometimes make is multiplying 599 by 0.20 and calling that the VAT. That gives you 119.80 — which is wrong, because you would be calculating 20% of the gross price rather than 20% of the net price. VAT is always a percentage of the net amount, even when it is expressed as part of the gross. The division method handles this correctly every time.
Frequently Asked Questions
Value Added Tax. It is called that because the tax is collected at each stage of the supply chain, applied to the "value added" at that particular stage — not only at the final point of sale the way US sales tax works. A manufacturer pays VAT on raw materials, adds value by turning them into a finished product, and then charges VAT when selling that product onward. Each business in the chain reclaims the VAT it already paid on its inputs and remits only the net difference to the government. By the time a product reaches the end consumer, the full rate has been collected in increments across the entire production process.
Not exactly, though for consumers the practical effect is similar — both systems add a tax to the things you buy. The main differences come down to three areas. First, VAT is typically included in the displayed price, so the amount on the shelf is the amount you pay at the register. US sales tax is added on top at checkout. Second, VAT is collected at every stage of the supply chain rather than just at the final sale. Third, VAT rates tend to run considerably higher than US sales tax — most European countries charge between 17% and 25%, while combined US state and local rates generally fall between 4% and 10%. From a purely mathematical standpoint, though, extracting the tax from a total price works the same way regardless of which system you are dealing with.
Divide the gross price by (1 + the VAT rate expressed as a decimal). For the UK standard rate of 20%, that means dividing by 1.20. If something costs 240 including VAT, the net price is 240 divided by 1.20, which equals 200. The VAT portion is 240 minus 200, which is 40. This works for any rate — just replace 1.20 with 1 plus whatever decimal your rate converts to. For 19% (Germany), divide by 1.19. For 22% (Italy), divide by 1.22.
Yes. Canada's federal Goods and Services Tax (GST) is 5%. Several provinces combine this with a provincial component into a Harmonized Sales Tax (HST) — 13% in Ontario, 15% in Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. Other provinces use a separate Provincial Sales Tax (PST) alongside the federal GST. To use this calculator for Canadian taxes, simply select "Custom rate" from the dropdown and enter the applicable combined rate for your province. The underlying math is identical to VAT: you are either adding or removing a percentage-based tax from a price.