How to add or remove VAT from a price
The simple formulas for adding VAT to a price or working out the VAT inside a VAT-inclusive amount, at any rate, with examples.
Value Added Tax (VAT), called GST or sales tax in some countries, is added to the price of goods and services. The maths is the same everywhere; only the rate changes.
Adding VAT to a price
Multiply the price before VAT by the rate, then add it on. At 20%, multiply by 0.20; at 7.5%, by 0.075.
- Price before VAT: 1,000
- VAT at 20%: 1,000 × 0.20 = 200
- Price including VAT: 1,200
Removing VAT from a VAT-inclusive amount
Divide the total by 1 plus the rate. The difference is the VAT. Don't simply take the rate off the total, which gives the wrong answer.
- Total paid: 1,200
- Price before VAT at 20%: 1,200 ÷ 1.20 = 1,000
- VAT inside the total: 200
Standard rates in the countries we cover
| Country | Standard rate |
|---|---|
| United Kingdom | 20% |
| Ghana | 20% (15% VAT + 2.5% NHIL + 2.5% GETFund levy) |
| Kenya | 16% |
| South Africa | 15% |
| Nigeria | 7.5% |
| United States | No VAT; states and cities set their own sales tax |
Anywhere else, enter your own rate in the calculator.
Showing VAT on an invoice
A good invoice shows the subtotal, the VAT rate, the VAT amount and the total separately, together with your VAT or tax number. Our invoice generator does this for you.
Some goods and services are exempt or zero-rated, and rates change. Check the current rules in your country before charging VAT.
