Whether you're pricing a product, quoting a client, or reconciling supplier invoices, the same question comes up constantly: how much VAT is in this number? The good news is the math is simple once you know the two formulas — and our free sales tax / VAT calculator does both directions instantly.
The two VAT formulas you actually need
There are only two operations. Everything else is repetition:
- Add VAT (net → gross):
net × (1 + rate). Example: €100 net at 20% →100 × 1.20 = €120gross. - Remove VAT (gross → net):
gross ÷ (1 + rate). Example: €120 gross at 20% →120 ÷ 1.20 = €100net, with€20VAT.
That's it. The classic mistake is multiplying by the rate instead of dividing — 120 × 0.20 = €24 is wrong for removing VAT, because the €120 already includes the tax. Use the percentage calculator when you need a quick percentage of a number instead.
2026 VAT rates: UK and EU
| Jurisdiction | Standard rate (2026) | Notes |
|---|---|---|
| United Kingdom | 20% | 5% reduced (energy, some children's items), 0% for most food & books |
| Germany | 19% | 7% reduced (food, books, hotels) |
| France | 20% | 10% / 5.5% / 2.1% reduced bands |
| Netherlands | 21% | 9% reduced |
| Spain | 21% | 10% / 4% reduced |
| Italy | 22% | 10% / 5% / 4% reduced |
| USA (sales tax) | 0% federal | State rates ~0–9.5% — not VAT; add at point of sale |
Rates change — always confirm the current rate for your country before invoicing. When in doubt, check your local tax authority's page.
Worked examples
Example 1: Pricing a product (add VAT)
You sell a service for €250 net and need the VAT-inclusive price at the German 19% rate:
250 × 1.19 = €297.50 gross, of which €47.50 is VAT.
Example 2: Reconciling a supplier invoice (remove VAT)
A UK invoice shows £480 total including 20% VAT. Your net cost:
480 ÷ 1.20 = £400 net, £80 VAT — this is the number that hits your expense account.
Rule of thumb: gross ÷ (1 + rate) always gives you the net. Never multiply to "remove" a tax that's already inside the total.
VAT on invoices: what must appear
If you're VAT-registered and invoicing clients, a compliant VAT invoice needs: your name and VAT number, the client's name and (for cross-border) their VAT number, the invoice date and number, a description, the net amount, the rate, and the VAT amount shown separately. Tools like InvoiceForge handle the layout and numbering automatically so you never forget a field.
Common VAT mistakes (and how to avoid them)
- Dividing instead of multiplying when adding VAT — use
× (1 + rate). - Using the wrong rate for the jurisdiction or product category (reduced vs. standard).
- Rounding to 2 decimals too early — round the final line total, not each line.
- Forgetting reverse-charge rules on B2B cross-border services within the EU.
Use the free calculator
Skip the mental math on every invoice: the VAT / sales tax calculator on Tooly adds and removes tax in both directions with any rate, and it works in your browser with no signup. For the invoicing side, InvoiceForge turns your totals into a clean, compliant invoice in under a minute.