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Guide

How to Add or Remove Sales Tax, VAT and GST

Understand tax-inclusive vs. tax-exclusive pricing and how to add or extract tax at any rate.

Open the Tax Calculator

A tax calculator adds sales tax, VAT, or GST to a net price, or extracts the tax from a tax-inclusive total. The two directions use different formulas, and mixing them up is a common mistake.

Tax-inclusive vs. tax-exclusive

A tax-exclusive price is the amount before tax (net). A tax-inclusive price already contains the tax (gross). In many countries retail prices are shown tax-inclusive; in others they are tax-exclusive and tax is added at the till.

The two core formulas

Add tax: Gross = Net × (1 + Rate% ÷ 100)

Remove tax: Net = Gross ÷ (1 + Rate% ÷ 100)

Tax amount = Gross − Net

How to use the calculator

  1. Enter the amount and the tax rate.
  2. Choose add tax (net → gross) or remove tax (gross → net).
  3. Read the gross, net, and tax amounts.

Examples

Adding 20% VAT to a $50 net price: 50 × 1.20 = $60 gross, $10 tax. Removing 20% VAT from a $60 gross price: 60 ÷ 1.20 = $50 net, $10 tax. Notice the tax amount is the same in both directions — only the starting figure differs.

When a tax calculator is useful

  • Pricing products for sale in different tax regions.
  • Reconciling receipts and invoices.
  • Splitting a tax-inclusive bill into net and tax for accounting.
  • Comparing tax-inclusive and tax-exclusive prices across stores.

Common mistakes

The biggest error is taking 20% of the gross price to remove tax. That gives the wrong net because the tax was computed on the smaller net amount. Always divide by (1 + rate), never multiply by (1 − rate).

Put it into practice

Use the Tax Calculator right now — free, in your browser, no sign-up required.

Try the Tax Calculator

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