VAT & GST Calculator (Add or Remove VAT on an Invoice)
Work out VAT or GST in either direction on a full invoice line — not just a single price. Enter the unit price, how many units, the rate, and any trade discount, and you get the net, VAT, and gross totals that belong on the invoice.
How this calculation works
Adding VAT: the unit price you enter is net (VAT-exclusive). The line net is unit price × quantity, minus any trade discount. VAT is then rate ÷ 100 of that discounted net, and gross = net + VAT.
Removing VAT: the unit price you enter is gross (VAT-inclusive). Dividing the gross by the rate does not work, because the rate applies to the net, not the gross. The correct net is gross ÷ (1 + rate ÷ 100), and the VAT is the difference.
Discount order matters and is not optional: a trade discount always reduces the net first, and VAT is charged on what the customer actually pays. Charging VAT on the pre-discount price would overstate the tax due.
Per-unit figures are derived from the line, not the other way round, so a discounted 3-unit line shows the true net and gross per unit after the discount has been spread across it.
Worked example
The VAT fraction — the shortcut worth memorising
Backing VAT out of a gross price is the calculation people get wrong most often, and the fix is a single fraction: rate ÷ (100 + rate). It turns a two-step division-and-subtraction into one multiplication, which is why bookkeepers memorise it per rate rather than reaching for a calculator on every line.
| Standard rate | VAT fraction of gross | Gross 1,000 contains | Net is |
|---|---|---|---|
| 5% | 5/105 ≈ 0.04762 | 47.62 VAT | 952.38 |
| 10% | 10/110 = 1/11 | 90.91 VAT | 909.09 |
| 19% | 19/119 ≈ 0.15966 | 159.66 VAT | 840.34 |
| 20% | 20/120 = 1/6 | 166.67 VAT | 833.33 |
| 22% | 22/122 ≈ 0.18033 | 180.33 VAT | 819.67 |
| 25% | 25/125 = 1/5 | 200.00 VAT | 800.00 |
Net, gross and the number your business actually keeps
For a VAT-registered business, the VAT line is never revenue. You collect it on behalf of the tax authority (output VAT), deduct the VAT you paid on your own purchases (input VAT), and remit the difference. That is why quoting a gross price as your income overstates it by the VAT fraction — on a 20% rate, a sixth of every gross invoice was never yours.
The practical consequence when pricing: if you are not yet registered and then cross the threshold, keeping the same gross price cuts your net revenue by the VAT fraction, while adding VAT on top raises the customer's price. Deciding which of those two you can absorb is the real question behind "should I price net or gross?", and it is worth modelling on your actual volumes before the registration date.
Why invoices sometimes disagree by a cent
Two correct methods can produce slightly different totals. Line-level rounding computes VAT per line, rounds each to the smallest currency unit, then sums; invoice-level rounding sums the net lines and applies VAT once. With many small lines the two drift apart by a few cents. Neither is wrong — but mixing them within one accounting system creates reconciliation noise, so pick one and apply it everywhere.
Multi-rate invoices need the same discipline per rate group. If some items are standard-rated and others reduced or zero-rated, calculate each rate group separately and add the results. A single blended rate across the whole invoice will not reproduce the correct VAT for any of the groups.