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Add or remove tax

Work out VAT or sales tax, either way round.

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The price and the rate

The breakdown

$120.00 to pay

$100.00 plus 20% tax

Before tax
$100.00
Tax
$20.00
Including tax
$120.00

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What this tool is for

This adds tax to a price, or works out the tax already sitting inside a price you were charged. The second direction is the one people get wrong: taking 20 per cent off a total that includes 20 per cent tax does not give the amount before tax, and the gap is big enough to matter on a return.

How to add or remove VAT and sales tax

  1. Enter the amount you have.
  2. Enter the tax rate, and say whether your amount already includes it.
  3. Read the figures before tax, the tax itself, and the total.

Questions

Why can I not just subtract 20 per cent to remove 20 per cent tax?

Because the tax was calculated on the smaller pre-tax figure, not on the total. To go back from a total at 20 per cent you divide by 1.2, which is not the same sum.

What is the difference between VAT and sales tax here?

The arithmetic is the same and only the name and rate differ, so this works for VAT, GST and sales tax alike.

Which rate should I use?

Whichever applies where you are and to what you are selling. Reduced and zero rates exist for certain goods, so check rather than assuming the standard rate.

Are the amounts I enter private?

Yes. The sums run in this browser tab and nothing about your invoices is sent anywhere.

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