GST / VAT Calculator

What this tool is used for

• Adding tax to a net price to get the gross.
• Backing tax out of a tax-inclusive total for an expense claim.
• Checking an invoice's tax line against the rate.
• Comparing a price across two jurisdictions with different rates.
• Producing net, tax and gross figures for a quote.

Frequently Asked Questions

How do I remove tax from a gross price?

Divide, do not subtract. At 20%, a gross of 120 divided by 1.20 gives a net of 100, so the tax is 20. Subtracting 20% of 120 gives 96 and a tax of 24 — wrong by a fifth, and the most common spreadsheet error in this area.

What are the usual rates?

The UK charges 20% standard, 5% reduced and 0% on some essentials. India's GST has slabs at 0, 5, 12, 18 and 28%. Australia, New Zealand and Singapore use a single rate. Rates change with budgets, so check the current figure before invoicing.

What is the difference between zero-rated and exempt?

Enormous for a business. Zero-rated sales carry 0% output tax but still let you reclaim the tax on your inputs. Exempt sales do not — the tax you paid on your costs becomes a cost. Two rates that both read as "no tax" to a customer differ completely on your return.

Why is VAT collected in stages?

Because each business charges tax on its sales and reclaims what it paid on its purchases, so only the value it added is taxed. The consumer bears the whole amount at the end; the staged collection is what makes the system self-policing between businesses.

How should I round?

Calculate on the line, then round the invoice total — rounding each line first can drift by a few pence across a long invoice, and tax authorities have specific rules about which is acceptable. Whichever you choose, be consistent, because the audit trail must reconcile.

Common errors and gotchas

• Removing tax by subtracting the rate rather than dividing, which is a common and material error.
• Applying the wrong rate for the goods or the jurisdiction, where reduced and zero rates exist.
• Adding tax to a price that already includes it.
• Rounding per line and per total inconsistently, which produces a penny discrepancy.
• Assuming the place of supply is the seller's location, when destination rules often apply.