GST & VAT Calculator

The reverse calculation is not what most people assume

Adding tax is straightforward: multiply by the rate and add it on. £100 plus 20% VAT is £120.

Extracting tax from a gross figure is where the mistake happens. To find the VAT inside £120, you do not take 20% of £120 — that gives £24, which is wrong. You divide by 1.20 to recover the net of £100, and the tax is the £20 difference.

The error is worth about 4% on a 20% rate, and it compounds across a set of receipts. Anyone doing expense claims or bookkeeping by hand runs into it regularly, which is why this tool makes the direction an explicit choice rather than something you have to remember.

The general formula for extraction is net = gross ÷ (1 + rate/100), and tax = gross − net.

GST, VAT and sales tax are not the same thing

VAT and GST are both value-added taxes, charged at each stage of production with businesses reclaiming what they paid on inputs. The consumer bears the full amount, but it is collected incrementally along the chain. The names are largely regional: the EU and UK say VAT, India, Australia, Canada and Singapore say GST.

US sales tax works differently. It is charged only at the final retail sale, with no input credits, and it is set at state and often city level — which is why an American price tag typically excludes tax while a European one includes it.

India's GST adds another wrinkle: it splits into CGST and SGST for transactions within a state, or IGST across state lines. The total rate is the same either way, so this calculator's single rate is correct for working out the amount; the split matters for filing rather than for arithmetic.

Rates worth knowing

India applies a slab system: 5% on essentials, 12% and 18% on most goods and services, and 28% on luxury and demerit goods. 18% is the most commonly encountered rate.

The UK charges 20% standard, 5% reduced on domestic fuel and some other items, and 0% on most food, books and children's clothing. EU member states set their own rates, generally between 17% and 27%.

Australia, New Zealand and Singapore use flat GST rates of 10%, 15% and 9% respectively. Canada layers a federal GST with provincial taxes, producing a combined rate that varies by province.

Rates change with budgets. Confirm the current figure with your tax authority before relying on it for anything filed.

Pricing decisions this affects

If you sell to consumers, they compare the gross price, so it is usually the gross you should choose as a round number and let the net fall where it may. If you sell to VAT-registered businesses, they reclaim the tax and compare the net, so the net is the number to make attractive.

Crossing a registration threshold matters more than the arithmetic. Below it you charge no tax but cannot reclaim what you pay; above it you charge tax but reclaim your inputs. For a business selling mostly to consumers, crossing the threshold effectively means either a price rise or a margin cut.

For invoicing, show the net, the tax and the gross separately with the rate stated. Most jurisdictions require it, and it makes your customer's bookkeeping — and any later dispute — considerably simpler.