Reverse VAT Calculator

The VAT inside a gross price, done correctly.

Extract VAT from a VAT-inclusive price using the VAT fraction, with the wrong method shown for comparison.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Price including VAT

VAT rate

Rates change with budgets and local ballot measures, and the rate that applies depends on the delivery address and product category. Treat these as planning figures, not as a filing.

Net of VAT

$100.00

$20.00 of VAT inside the price

Gross$120.00

VAT fraction20/120

VAT contained$20.00

Net$100.00

At 20% the VAT fraction of a gross price is 20/120, which is 16.67%. Multiplying the gross by 20% gives $24.00: overstated by $4.00, and wrong in the same direction on every invoice you process.

How the Reverse VAT Calculator works

Removing VAT from a price is division, not subtraction of a percentage. The VAT fraction at 20% is 20/120, one sixth, or 16.67% of the gross, because the 20% was applied to the net. Multiplying the gross by 20% overstates the VAT by exactly a fifth every time.

Also known as: remove VAT from price · VAT backwards calculator · net from gross VAT calculator

What the formula says

Extracting VAT from a gross amount is gross ÷ (1 + rate) for the net, and gross − net for the VAT. The shortcut at 20% is to divide by 6, gross ÷ 6 gives the VAT directly, because 20 ÷ 120 = 1 ÷ 6.

At other rates the equivalent divisors are: 5% divide by 21, 19% divide by 6.263, 21% divide by 5.762, 23% divide by 5.348. The divide-by-six shortcut only works at 20% and is applied at other rates surprisingly often.

How that looks in practice

A £58.00 gross price at 20%. Net is 58 ÷ 1.2 = £48.33 and VAT is £9.67. Checking with the shortcut: 58 ÷ 6 = £9.67. ✓

The multiplication error gives 58 × 0.2 = £11.60 of VAT and a net of £46.40, £1.93 wrong on one item, and 20% too high on the tax figure.

At 23% the gap widens: a €58 gross price contains €10.85 of VAT by division and €13.34 by multiplication, a 23% overstatement of the liability.

Where this breaks down

A mixed-rate invoice cannot be reversed with a single divisor. Standard-rated goods alongside zero-rated books need the extraction done per line, and applying the standard divisor to the whole invoice overstates the VAT on the zero-rated part by all of it.

Shipping usually takes the rate of the goods it delivers, which for a mixed basket means apportioning it. Most systems handle this and most manual reconciliations do not.

How to act on this

Reverse per rate rather than per invoice, and take the breakdown from the system rather than reconstructing it. Every accounting package exports VAT by rate for exactly this reason.

Then use the net figure everywhere internally. The reverse calculation exists to get you back to the number that all the business arithmetic should have been using in the first place.

Where the extraction actually matters

The routine uses are reclaiming input VAT on a purchase invoice, working out true revenue behind a gross till figure, and reconciling a marketplace payout against a VAT return.

The one with real money attached is input VAT recovery. A receipt that does not show the VAT separately, or a supplier who is not registered, means there is no input VAT to reclaim at all, the whole gross amount is a cost. Assuming a fifth of every purchase is recoverable and discovering otherwise at year end is a common and expensive surprise.

The rule worth applying is that no purchase over a trivial amount gets paid without a proper VAT invoice showing the supplier's registration number and the VAT separately stated. It is a small discipline that turns 20% of a purchase from a cost into a wash, and it only works prospectively, chasing invoices from a year ago rarely succeeds.

On top of that, most VAT systems permit calculation either per line or per invoice, and the two can differ by a penny or two on a multi-line order. Whichever basis is used has to be applied consistently, because alternating between them produces reconciliation differences that look like errors.

The tolerance is small enough that nobody investigates a single order and large enough that it accumulates visibly across a month, which is exactly the kind of discrepancy that consumes an afternoon at quarter end.

Where to go next

The Reverse VAT question rarely arrives on its own. These are the ones that usually come with it:

VAT Calculator — Add VAT or extract it, at any rate.
Tax-Exclusive Price Calculator — Net revenue from a gross price, correctly.
Reverse Sales Tax Calculator — Extract the tax from a total that already includes it.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

Sources

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

What is the VAT fraction at 20%?

One sixth, or 16.667% of the gross price. So £120 gross contains £20 of VAT and £100 net. Multiplying £120 by 20% gives £24, which is £4 too much.

What about the 5% reduced rate?

The fraction is 5/105, which is 4.762% of the gross. A £105 gross price contains £5 of VAT.

Why does the shortcut feel right?

Because at small rates the two answers are close. At 5% the error is a quarter of a percent; at 20% it is over three percent of the total. The intuition scales badly, which is why it survives.

Where does this matter most?

Reconciling marketplace payouts, expense claims, and any accounting where the only figure you have is the gross. Getting it wrong understates net revenue consistently, so the error never averages out.