Price Before Tax Calculator
Strip tax out of a tax-inclusive price.
Price before tax
$100.00
at 20.0%
Subtracting 20.0% from the gross gives $96.00, which is wrong — the tax was calculated on the smaller net figure.
How the Price Before Tax Calculator works
Going backwards from a tax-inclusive price is where the common error lives: subtracting 20% from a VAT-inclusive figure does not remove the VAT. You have to divide by 1.20, and the difference is not trivial.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How do I remove tax from a price?
Divide by (1 + rate). At 20% VAT, a £120 gross price is 120 ÷ 1.20 = £100 net, with £20 of VAT. Subtracting 20% would give £96, which is wrong by £4.
Why doesn't subtracting the percentage work?
Because the tax was calculated on the smaller net figure, not the larger gross one. Subtracting the rate from the gross applies it to the wrong base, and the error grows with the rate.
What is the VAT fraction?
A shortcut for the tax portion of a gross price. At 20% it is 1/6, so £120 × 1/6 = £20 of VAT. At 5% it is 1/21. Useful for quick mental checks.
When do I need the net price?
For accounting entries, margin calculations and VAT returns. Margins must be calculated on net figures — using gross prices on one side and net costs on the other overstates margin substantially.