How to Calculate VAT: Add or Remove VAT (Formulas + Examples)
September 26, 2026
To add VAT, multiply the net price by 1 plus the VAT rate: at 20%, £100 × 1.20 = £120. To remove VAT from a price that already includes it, divide by 1 plus the rate — £120 ÷ 1.20 = £100 — rather than subtracting 20% of the gross, which would give the wrong answer of £96. The VAT amount is always the difference between the gross (VAT-inclusive) and net (VAT-exclusive) price.
What is the formula for adding VAT?
Gross price = net price × (1 + VAT rate), where the rate is written as a decimal (20% = 0.20). The VAT amount on its own is net price × VAT rate. For example, adding 21% VAT to €80: VAT = 80 × 0.21 = €16.80, and gross = 80 × 1.21 = €96.80. If you're adding VAT to several items, you can either calculate it per item or on the total; the result differs only by rounding, and which approach is allowed on an invoice depends on each country's rules.
What is the formula for removing VAT from a price?
Net price = gross price ÷ (1 + VAT rate). The VAT contained in the gross price is gross − net, or equivalently gross × rate ÷ (1 + rate). For example, removing 20% VAT from £250: net = 250 ÷ 1.20 = £208.33, and the VAT is £41.67. A quick shortcut for 20% VAT: the VAT is one-sixth of the gross price, because 0.20 ÷ 1.20 = 1/6. To do this instantly for any rate, use the free VAT calculator, which adds or removes VAT and shows the net, VAT and gross amounts.
Why can't you just subtract the VAT percentage from the gross price?
Because the VAT percentage is applied to the net price, not the gross price. Taking 20% off £120 gives £96, but 20% VAT on £96 is only £19.20, which brings you back to £115.20 — not £120. Taking a percentage off a larger number removes too much. This is the single most common VAT mistake on quotes and expense claims, and it always understates the net price.
What does VAT look like at 17%, 18%, 19%, 20% and 21%?
The table uses a net price of 100 in any currency, so each row doubles as a quick reference for the multiplier and divisor. The last column shows what share of a VAT-inclusive price is tax, which is useful when you only have receipts showing gross amounts.
| VAT rate | Add VAT (net 100) | Remove VAT from gross | VAT share of gross price |
|---|---|---|---|
| 17% | 100 × 1.17 = 117.00 | 117 ÷ 1.17 = 100.00 | 17 ÷ 117 ≈ 14.53% |
| 18% | 100 × 1.18 = 118.00 | 118 ÷ 1.18 = 100.00 | 18 ÷ 118 ≈ 15.25% |
| 19% | 100 × 1.19 = 119.00 | 119 ÷ 1.19 = 100.00 | 19 ÷ 119 ≈ 15.97% |
| 20% | 100 × 1.20 = 120.00 | 120 ÷ 1.20 = 100.00 | 20 ÷ 120 ≈ 16.67% (1/6) |
| 21% | 100 × 1.21 = 121.00 | 121 ÷ 1.21 = 100.00 | 21 ÷ 121 ≈ 17.36% |
What are the standard VAT rates in the UK, EU and Israel?
The table lists standard rates only; most countries also have reduced rates (for example on food, books or public transport) and some goods and services are zero-rated or exempt. Rates were checked on 26 September 2026 against published 2026 rate tables. VAT rates change — several EU countries raised theirs in 2024 and 2025 — so always confirm the current rate with the country's tax authority before invoicing.
| Country | Standard rate | Country | Standard rate |
|---|---|---|---|
| United Kingdom | 20% | Netherlands | 21% |
| Israel | 18% (17% until end of 2024) | Belgium | 21% |
| Germany | 19% | Ireland | 23% |
| France | 20% | Poland | 23% |
| Italy | 22% | Portugal (mainland) | 23% |
| Spain | 21% | Greece | 24% |
| Austria | 20% | Sweden | 25% |
| Luxembourg | 17% | Denmark | 25% |
| Cyprus | 19% | Finland | 25.5% |
| Romania | 21% | Hungary | 27% |
How do you calculate VAT in a spreadsheet?
Put the net or gross price in one cell (say A2) and the rate in another (B2, entered as 20% or 0.2). To add VAT: =A2*(1+B2). To get the VAT amount on a net price: =A2*B2. To remove VAT from a gross price: =A2/(1+B2). To get the VAT contained in a gross price: =A2-A2/(1+B2). Wrap results in =ROUND(…,2) if you need values rounded to the cent or penny.
How do you work out the VAT rate from a net and a gross price?
Divide the gross price by the net price, subtract 1 and multiply by 100: VAT rate = (gross ÷ net − 1) × 100. For example, an invoice showing a net price of €50.00 and a total of €59.50 was charged 59.50 ÷ 50 − 1 = 0.19, or 19% VAT. If you only know the VAT amount and the net price, the rate is VAT ÷ net × 100: €9.50 ÷ €50 × 100 = 19%. This is a quick way to check that a supplier applied the rate you expected, or to spot items that were charged a reduced rate.
Is VAT calculated on the price after discounts?
Generally yes: VAT is charged on the price actually paid, so a discount given at the time of sale is deducted before VAT is added. For example, a £200 item with a 10% discount has a net price of £180, and 20% VAT makes the gross £216. Special cases — vouchers, prompt-payment discounts and discounts granted after the invoice — are treated differently from country to country, so check local guidance for those.
What's the difference between VAT-inclusive and VAT-exclusive prices?
A VAT-exclusive (net) price is before tax; a VAT-inclusive (gross) price already contains it. In the UK and EU, prices shown to consumers must normally include VAT, while business-to-business quotes are often given net of VAT. When comparing quotes, make sure both are on the same basis — a "£1,000 + VAT" quote at 20% costs £1,200, and is more expensive than a £1,150 VAT-inclusive one.