How to add a tax rate to a price or pull it back out
A tax-exclusive quote and a tax-inclusive total need opposite operations. This calculator handles both for one taxable amount at one rate supplied by the visitor. VAT and sales tax can have very different legal rules, but for this narrow price arithmetic they share an add-or-extract formula.
Adding a rate and extracting an included rate are different operations. If a net price is 100 and the user enters 20%, tax is 20 and gross is 120. If a displayed gross is 120 with 20% already included, the net is 120 ÷ 1.20 = 100, so the included tax is 20. Subtracting 20% of the gross would give 96 and overstate the tax because the rate applies to net. The page calls both VAT and sales tax searches to this narrow arithmetic only; it has no tax database.
One receipt handles both directions of the price question: add tax to a before-tax quote or recover tax already inside a displayed total. The source of the rate remains the user's entry.
How entered price, tax rate and inclusive mode split net and tax
The mode decides whether the price is multiplied or divided by one plus the rate. Choosing the wrong mode causes a bigger error than any rounding difference.
- Entered price
- One fully taxable amount, either before or after tax depending on the mode. In exclusive mode the total grows with the price; in inclusive mode the entered figure stays as the total and only its split changes. Enter one line or one taxable subtotal, not a mix of taxed and untaxed items.
- Tax rate from your own source
- The percentage from a verified source, such as an invoice or the tax authority. At 20%, a 100 net price gains 20 of tax; at 17%, it gains 17. There is no rate database behind the field, so an outdated or wrong rate passes through unchanged.
- Price includes or excludes tax
- The direction of the calculation. Treating a 120 tax-inclusive price as exclusive at 20% gives a 144 total and 24 of tax, instead of the correct 100 net and 20 of tax. Check whether a shelf price or quote already contains the tax before choosing.
- Rounding
- Values stay unrounded until display, so 120 including 5% shows 114.29 net and 5.71 tax. An invoice that rounds tax on each line separately, then adds the lines, can differ from this total by a cent or so.
Steps
- Enter the quoted amount and a rate you have verified for the transaction.
- Choose before tax to add that rate, or after tax to extract a rate already included in the displayed amount.
- Compare the pre-tax amount, tax portion and total; confirm real invoice rounding and taxable items externally.
Reading tip: The receipt marks whether the entered figure was before or after tax. Read its net, tax and gross lines before using the number on an invoice or budget.
Price checks that need tax added or extracted
Check a VAT-inclusive tag
Recover the before-tax amount from one total and a verified rate.
Estimate a tax-exclusive quote
Add a rate you supply to a pre-tax amount for a rough total.
Reconcile a receipt
Compare the net, tax and gross arithmetic on one taxable item.
Test a changed rate
Explore a different user-entered percentage while keeping the same price.
How the calculation works
- net
- Price before the entered flat tax rate.
- gross
- Price including the modeled tax.
- rate
- Percentage supplied by the visitor from a relevant source; the site does not choose it.
- tax
- Difference between gross and net under one fully taxable price.
Legal taxable bases, rates, exemptions and invoice rounding must be verified separately.
What every part means
- net
- Price before the entered flat tax rate.
- gross
- Price including the modeled tax.
- rate
- Percentage supplied by the visitor from a relevant source; the site does not choose it.
- tax
- Difference between gross and net under one fully taxable price.
Calculate it step by step
The factor connects a fully taxable net price with its gross total.
The entered amount is the before-tax base in this branch.
The entered amount is the after-tax total in this branch.
The same currency unit must be used throughout. Internal decimals remain unrounded until output; displayed currency uses two decimal places. A real invoicing system may round each line item, use multiple rates or impose special taxable-base rules.
See how Calculation Guide tests examples and handles calculation limits.
See it in practice
- Entered price
- 120 currency units
- Tax rate from your own source
- 20 %
- Entered price is
- After tax: extract included tax
120 already includes a 20% rate: net = 120 / 1.20 = 100; tax = 120 − 100 = 20. Conversely, 100 before tax plus 20% becomes 120.
- Price before tax100
- Tax portion20
Interpretation & limitations
How to read your result
The result is an arithmetic split of one quoted price at your chosen rate. A tax-exclusive amount increases after tax; a tax-inclusive amount keeps the entered total unchanged and reveals its included portion. A 0% entry yields no tax in either mode.
Where this estimate stops
VAT and sales-tax laws differ in registration, place of supply, exemptions, input credits, taxable items and effective dates. The GOV.UK guidance itself describes multiple VAT schemes. This page does not determine which legal rate applies or calculate business VAT payable; verify the rate and invoice requirements with the relevant authority.
Frequently asked questions
01Does this tool know the VAT or sales-tax rate where I live?
No. Rates, exemptions and effective dates vary. The calculation uses only the percentage you enter.
02Why is extracting 20% from 120 not 120 minus 24?
A 20% rate applies to the before-tax amount. Divide 120 by 1.20 to find 100 before tax; the included tax is 20.
03Can I use a zero rate?
Yes. Net and gross then match and the tax portion is zero; this does not establish whether a transaction is legally zero-rated or exempt.
04Does this calculate VAT owed by a business?
No. VAT returns may involve input credits, registration status and scheme rules; this page only splits or adds one price rate.
05Should I calculate tax before or after a discount?
That depends on your transaction and jurisdiction. Enter the taxable base appropriate to the rule you have verified.
06Why can my receipt differ by a cent?
Invoices can round at each line or at the total. This calculator retains decimal values until its single displayed result, so cent rounding can differ.
07Two taxes apply to the same price. Can I just add the rates?
Only if both are charged on the same pre-tax base; then 5% and 10% combine to 15%. If the second tax is charged on a price that already includes the first, multiply the factors instead: 1.05 × 1.10 = 1.155, so enter 15.5%. On a 100 net price that gives 115.50 rather than 115.