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Reverse VAT Calculator

Enter the gross price and VAT rate to remove the tax.

How it is calculated

Starting from a price that already includes VAT, the tool recovers the pre-tax amount with net = gross / (1 + rate / 100) and then VAT = gross − net. The rate is typed as a plain percentage (20 for 20 percent) and is the rate you choose; the tool does not look up rates, which differ by country, by product category and over time. Gross must be above zero and the rate zero or more. Amounts are shown in dollars with two decimals, so the displayed net and VAT can differ from the exact figures by a cent. A rate of 0 returns the gross as the net with no tax. Reduced rates, exemptions and mixed baskets must be handled line by line.

Worked example

A receipt shows a VAT-inclusive total of 1,200 and the applicable rate is 20 percent. Divide by 1 plus the rate: 1,200 / 1.20 = 1,000, so the net price is $1,000.00. The VAT is the difference: 1,200 − 1,000 = 200, shown as $200.00. Notice that 200 is one sixth of the gross, not 20 percent of it; taking 20 percent of 1,200 would give 240 and overstate the tax.

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Common mistakes

  • Taking the rate percentage of the gross price (20 percent of 1,200 = 240). VAT is charged on the net, so the tax inside a gross price is smaller; here it is 200.
  • Subtracting the rate from 100 and dividing, for example gross × 0.80. Removing 20 percent from a gross amount is not the same as removing 20 percent VAT; the correct divisor is 1.20.
  • Entering the rate as 0.20. The field expects 20; a value of 0.20 is read as 0.2 percent and removes almost no tax.
  • Applying a single rate to a receipt that mixes products with different rates, such as food and electronics. Split the receipt and calculate each rate separately.
  • Using the rate of another country or year by habit. Rates change, so check the rate printed on the invoice instead of assuming the standard one.

Sources

About this calculator

Retail prices are usually displayed VAT-inclusive (gross), but businesses often need to work backwards to find the underlying net price — for bookkeeping, invoicing, expense reporting, or reconciling receipts where only the total paid is known. Because VAT is calculated on the net amount rather than the gross, you can't just multiply the gross price by the VAT rate to find the tax portion; the correct method divides the gross price by (1 + VAT rate) to recover the net price first.

This calculator strips VAT out of a gross price at any given rate, returning both the net price and the VAT amount. It's a routine calculation for bookkeepers, accountants, and business owners across VAT jurisdictions worldwide who need to separate tax from the underlying sale price on invoices, expense claims, and financial statements.

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Comments (1)

  • Editorial team

    A shortcut for checking a receipt: the VAT inside a gross price is the rate divided by 100 plus the rate. So at 10 percent it is 9.09 percent of the gross, and at 20 percent exactly one sixth, never the rate itself. Compare your result with that share before booking it. Which VAT rates do you handle most often in your own country?

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