How to Calculate Sales Tax & Value Added Tax (VAT)
Tax calculations broadly fall into two operational modes: Adding Tax to an exclusive net base or Extracting/Removing Tax from an inclusive gross figure.
1. Adding Tax (Net to Gross)
Use when you have a base price and need to add your local sales tax or VAT rate.
Tax Amount = Net × (Rate / 100)
Gross Total = Net + Tax Amount
2. Removing Tax (Gross to Net)
Use when you have a total receipt amount and need to reverse-calculate the tax contained within.
Net Amount = Gross / (1 + (Rate / 100))
Tax Amount = Gross - Net Amount
Difference Between VAT and Sales Tax
While both Value Added Tax (VAT) and Sales Tax are indirect consumption taxes levied on goods and services, their administrative mechanics differ:
- Value Added Tax (VAT): Collected incrementally at each stage of the supply chain. Businesses pay VAT on purchases and collect VAT on sales.
- Sales Tax: A single-stage tax collected strictly at the final point of sale to the end consumer.
Global Tax Calculation Guide & Standard Rates
| Country / Region | Tax Type | Standard Rate | Reduced Rates |
|---|---|---|---|
| United Kingdom | VAT | 20% | 5%, 0% |
| Germany | MwSt | 19% | 7% |
| France | TVA | 20% | 10%, 5.5% |
| Greece | ΦΠΑ | 24% | 13%, 6% |
| United States | Sales Tax | 0% - 10.25% | Varies by State |
Frequently Asked Questions (FAQ)
How do I extract VAT from a total price?
Enter the full amount into 'Original Amount', set your local VAT rate, and click 'Remove Tax'.
Is this tax calculator free for commercial use?
Yes, TaxVatCalculator.com is 100% free for freelancers, businesses, accountants, and consumers worldwide without registration.
What is the formula for reverse tax calculation?
The formula is: Net = Gross / (1 + Rate/100). For example, $120 total at 20% VAT equals $100 Net amount.