Tax & discounts
Add or remove VAT/GST/sales tax and calculate tax-equivalent discounts.
How to use
Enter an amount and a tax rate, and say whether the amount already includes the tax. The calculator shows the net amount (before tax), the tax and the gross amount (with tax). Other modes add the tax to an amount or remove it from an amount (these two ignore the Tax included / Tax excluded setting), show the tax-equivalent discount or apply a regular discount to the gross price. The rate buttons are common rates, not country presets.
The formulas, with the rate as a decimal (20% = 0.20): gross = net × (1 + rate), net = gross ÷ (1 + rate), and tax = gross − net. Adding tax multiplies; removing it divides. That is why you cannot remove 20% VAT from 120 by taking 20% off: 120 − 20% is 96, but the net price is 120 ÷ 1.20 = 100.
The tax is a smaller share of the gross price than the rate suggests, because the rate applies to the net price. The share is rate ÷ (100 + rate): 16.67% of a price with 20% tax, 17.36% with 21% and 18.70% with 23%. The calculator calls this the tax-equivalent discount: a shop advertising that it pays the VAT for you is giving that discount, not the full rate.
The regular discount mode applies a percentage to the gross price, which is how discounts on shelf prices are usually advertised. Typing a discount percentage switches to this mode.
Results are shown rounded to two decimal places, and each figure is rounded separately, so net + tax can differ from the gross by a cent. Invoices that round the tax on every line can end up a cent away from a tax worked out on the total; neither is wrong, but the method has to be the same on both sides.
Example
100 + 20%Net 100, tax 20, gross 120.120 with 20% includedNet: 120 ÷ 1.20 = 100; tax: 20. Taking 20% off 120 would give 96, which is wrong.99.99 with 23% includedNet 81.29 and tax 18.70.49.90 with 19% includedNet 41.93 and tax 7.97.Tax-equivalent discount at 21%21 ÷ 121 = 17.36%. A 17.36% discount on a price with 21% tax leaves the net price.
Frequently asked questions
Is this a calculator for a specific tax system?
No. It is a generic percentage calculation and does not cover jurisdiction-specific tax rules or replace accounting advice.
Why is the tax on a price of 120 that includes 20% tax 20 and not 24?
Because the 20% rate applies to the net price of 100, not to the 120 that already includes the tax. Of the 120, the tax is 20 ÷ 120 = 16.67%.
Are shop prices quoted with or without tax?
It depends on the country. In the European Union and the United Kingdom, prices for consumers must include VAT. In the United States, sales tax is set by states and local governments (some states charge none) and is usually added at the checkout. Business-to-business prices are often quoted without tax.
Where do I find the right rate?
From the tax authority of the country concerned. Many countries have a standard rate and reduced rates for some goods and services, and rates change, so check the official source rather than an old list.
Can I calculate an invoice with several rates?
Calculate each rate separately and add the results. One calculation uses one rate.