VAT Calculator: How to Calculate VAT?
VAT (Value Added Tax) is an indirect tax added to the price of goods and services. Calculating VAT is important not only for businesses but also for consumers who want to know how much of the price consists of tax.
Formula for VAT Calculation:
If you want to calculate VAT from the net price (price excluding VAT), use the formula:
VAT = Net Price × (VAT Rate / 100)
Example: If the net price of a product is €100 and the VAT rate is 20%, the calculation will be:
VAT = 100 × (20 / 100) = €20
Calculation of the Price Including VAT:
To calculate the final price including VAT, use the formula:
Price with VAT = Net Price + VAT
or
Price with VAT = Net Price × (1 + VAT Rate / 100)
In our example:
Price with VAT = 100 × 1.20 = €120
Calculating VAT from the Price Including VAT:
If you already have the price including VAT and want to determine the VAT amount, use the formula:
VAT = Price with VAT × (VAT Rate / (100 + VAT Rate))
Example: If the price including VAT is €120 and the VAT rate is 20%:
VAT = 120 × (20 / 120) = €20