Sales Tax & VAT Calculator
Tax-inclusive and tax-exclusive prices for any sales-tax or VAT rate
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What this calculator computes
The sales-tax and VAT calculator converts between tax-exclusive and tax-inclusive prices at any tax rate, with presets for the standard rates of major economies — UK 20% VAT, EU rates from 17–27%, US state sales taxes from 0–9.5%, Canadian GST/HST from 5–15%, Australian GST 10%, and Indian GST from 5–28% depending on the goods category. The calculator handles both directions: adding tax to a net price (for US sales-tax-style transactions where prices are quoted exclusive of tax) and stripping tax from a gross price (for UK/EU/AU VAT-style transactions where prices are typically quoted inclusive). Adding 20% VAT to a £100 net price gives a £120 gross price; stripping 20% VAT from a £120 gross price gives a £100 net (note: not £96, which is the common error of subtracting 20% from 120 instead of dividing by 1.20). The arithmetic asymmetry between adding and stripping is the single most common source of consumer and small-business tax errors. UK VAT is currently 20% on most goods and services, with reduced rates of 5% for domestic energy and children's car seats, and 0% for most food, books, and children's clothing. US sales tax is set state-by-state and varies from 0% (Oregon, Montana, New Hampshire, Delaware, Alaska) to 7% (California, Tennessee), with local-jurisdiction additions pushing the effective rate to 9.5% in some cities (Chicago, Seattle). **Educational tool only — not tax advice. The calculator handles the arithmetic of adding and stripping tax but does not advise on what tax rate applies to specific goods, when registration is required, or how to account for tax in business accounts. Consult HMRC, IRS, or your accountant for tax-specific guidance.**
Calculator
The formula
Formula
Add tax: gross = net × (1 + rate/100) Strip tax: net = gross / (1 + rate/100)
Worked example
When to use this calculator
Use this calculator any time you need to convert between tax-inclusive and tax-exclusive prices — receipt analysis (recovering the net price from a UK shop receipt for accounts), business expense claims (where VAT-registered companies need the net figure for input-VAT recovery), pricing decisions (setting a shelf price that achieves a target net margin), and US-EU price comparison (where a UK shop's £200 VAT-inclusive price needs to be compared to a US retailer's $250 tax-exclusive equivalent before adding 8% state tax). The calculator is also useful for US e-commerce sellers calculating drop-ship costs into VAT countries, where the EU customer pays the gross VAT-inclusive price but the seller recovers VAT input on goods purchased and remits VAT output on sales. For complex cross-border transactions involving EU MOSS registration, US economic-nexus rules, or Indian GST place-of-supply provisions, consult a qualified tax adviser; the calculator handles single-rate single-jurisdiction arithmetic only.
Common input mistakes
- Subtracting the tax percentage from a gross price to find the net. Stripping 20% VAT from a £120 gross price gives £100 net (120 / 1.20), not £96 (120 − 120 × 0.20). The common error works only if you also accept that 20% × £100 = £24 of VAT, but the actual VAT on a £120 inclusive price at 20% is £20 (the £20 added to the £100 net). Always divide by (1 + rate), never subtract a percentage of the gross.
- Confusing tax-inclusive and tax-exclusive pricing conventions. UK and EU prices are quoted VAT-inclusive at retail level (the price on the shelf is what you pay), while US prices are typically quoted tax-exclusive (sales tax is added at the till). A £20 UK item is £20; a $25 US item shown at the shelf is $27 after 8% sales tax. Confusion between the conventions produces order-of-magnitude pricing errors when converting between currencies and adding tax in the wrong direction.
Frequently asked questions
How do I add VAT to a price?
Multiply the net price by (1 + rate/100). For UK 20% VAT, multiply by 1.20: £100 net × 1.20 = £120 gross. For 5% reduced-rate VAT, multiply by 1.05. The same formula works for any tax rate: a $100 net price with 8.875% New York City sales tax becomes $108.875 gross. Always apply the multiplication factor to the net price, never to the gross.
How do I remove VAT from a price?
Divide the gross price by (1 + rate/100). For UK 20% VAT, divide by 1.20: £120 gross / 1.20 = £100 net. The VAT amount is the gross minus the net: £120 − £100 = £20. The common error of subtracting 20% from the gross (£120 − £24 = £96) gives the wrong answer because the 20% VAT was added to the £100 net, not to the £120 gross. Always divide; never subtract.
What is the standard UK VAT rate?
UK standard VAT is 20%, applied to most goods and services. Reduced-rate items (5%) include domestic energy, children's car seats, mobility aids, and contraceptive products. Zero-rated items include most unprocessed food, books, newspapers, children's clothing, and prescription medicines. Exempt items (no VAT, no input-VAT recovery) include education, financial services, and rent. Always check HMRC guidance for the specific rate of unfamiliar goods; misclassification is a common source of small-business VAT errors.
What sales tax rates apply in the US?
US sales tax is set state-by-state with local additions. Oregon, Montana, New Hampshire, Delaware, and Alaska have no state sales tax (Alaska has local sales taxes in some areas). California has the highest state rate at 7.25%, with local additions taking the effective rate above 9% in Los Angeles and the Bay Area. Tennessee combines a 7% state rate with local additions to 9.75%. Most other states fall in the 5–7% range. Always check the local rate for the specific city or county.
How does VAT differ from sales tax?
VAT (UK, EU, AU, India) is collected at every stage of the supply chain, with each business reclaiming VAT on inputs and charging VAT on outputs; the consumer pays the full rate on the final sale price. Sales tax (US) is collected only at the final retail sale; intermediate B2B transactions are typically exempt with a resale certificate. VAT is more complex administratively (every business above the threshold must register and file returns) but produces a more reliable revenue stream and is harder to evade. The economic incidence on the consumer is similar in both systems.