Sales Tax & VAT Calculator
Two directions: add tax to a net price, or work backwards from a tax-inclusive price to the net amount.
Adding tax versus extracting it
Adding is straightforward: a $100 item at 20% tax becomes $120. Extracting (the “remove” mode) is the one people get wrong — you cannot take 20% off $120 and get back to $100, because the tax was 20% of the net price, not of the gross. The correct reverse is $120 ÷ 1.20 = $100, with $20 of tax. This matters for invoicing, refunds and margins, which is why the tool does both directions.
Frequently asked questions
What is the difference between sales tax and VAT?
Mathematically none for this calculation — both are percentage additions to a net price. The difference is who pays it along the chain: sales tax is collected once at the final sale (US model), while VAT is collected at every stage (EU and much of the world). Prices work the same either way.
Why did my manual reverse-calculation not match?
Almost always because the tax percentage was applied to the gross amount instead of dividing by (1 + rate). Use the “remove” mode and compare — the difference grows with the tax rate.