How do I add 20% VAT to a price?

Multiply the net price by 1.20. For a net of $100, the gross is 100 × 1.20 = $120, of which $20 is VAT.

How do I work out the VAT included in a gross price?

Divide the gross by (1 + rate) to get the net, then subtract. For $120 gross at 20%: net = 120 ÷ 1.20 = $100, so VAT = $20.

Guide1 min readUpdated August 12, 2026

How to add or remove VAT

Short answer

To add VAT, multiply the net price by (1 + rate): gross = net × (1 + rate). To remove VAT from a gross price, divide by (1 + rate): net = gross ÷ (1 + rate). The VAT amount is the difference between gross and net.

Net, VAT, and gross

The net price is before tax, the gross price is what the customer pays, and VAT is the difference. VAT is a percentage of the net price, so the rate is applied to net — not to gross.

Add VAT to a net price

vat = net × rate
gross = net × (1 + rate)

Example: net $100 at 20% VAT
vat = 100 × 0.20 = $20
gross = 100 × 1.20 = $120

Adding VAT

Remove VAT from a gross price

Extracting VAT is the reverse: divide the gross by (1 + rate) to recover the net, then the VAT is what is left. A common mistake is subtracting the rate from the gross, which is wrong because the rate applies to net.

net = gross ÷ (1 + rate)
vat = gross − net

Example: gross $120 at 20% VAT
net = 120 ÷ 1.20 = $100
vat = 120 − 100 = $20

Removing VAT

Do not subtract the rate from the gross20% VAT on a $120 gross is not $24. Because VAT is charged on the net, you divide by 1.20, giving $20 of VAT — not 20% of the gross.

Try it: VAT / Sales Tax CalculatorEnter a price and rate to add or remove VAT and see net, VAT, and gross.Open tool

References

Value-added tax on Wikipedia — Wikipedia