How to Calculate VAT: A Complete Guide

By Calcroutine TeamUpdated 2026Financial Calculators

VAT

VAT, or Value Added Tax, is added to the price of many goods and services. This guide explains how to add VAT to a price and how to remove VAT from a VAT-inclusive amount.

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What is VAT?

VAT is a tax added to goods or services. The rate depends on the country and the type of product or service.

How to Add VAT to a Price

Use this formula:

VAT Amount = Price × VAT Rate / 100
Total Price = Price + VAT Amount

Example: If the price is 100,000 and VAT is 18%, VAT is 18,000 and the total price is 118,000.

How to Remove VAT from a VAT-inclusive Price

Use this formula:

Net Price = Gross Price ÷ (1 + VAT Rate / 100)
VAT Amount = Gross Price − Net Price

Example: If the VAT-inclusive price is 118,000 and VAT is 18%, the net price is 100,000 and the VAT amount is 18,000.

Common VAT Mistakes

Adding VAT twice to the same amount.
Removing VAT using subtraction instead of division.
Using the wrong VAT rate.
Rounding too early before the final result.

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