Adding VAT to a quoted price is the single most common VAT calculation freelancers and small businesses do — and the one most worth getting exactly right on every invoice.
The Formula
Net Price × (1 + VAT Rate as a decimal) = Total Price. For a 20% rate, that's multiplying by 1.20.
Worked Examples
| Net Price | UK (20%) | Germany (19%) | US (avg. ~7%) |
|---|---|---|---|
| $400 | $480.00 | $476.00 | $428.00 |
| $1,200 | $1,440.00 | $1,428.00 | $1,284.00 |
| $3,500 | $4,200.00 | $4,165.00 | $3,745.00 |
US figures use an illustrative average rate since actual sales tax varies by state, city, and even the type of goods or service sold.
Free VAT Calculator — Try It, Then Go Pro
Rather than multiplying manually for every invoice, a free calculator applies the correct rate instantly. The Pro version stores a default rate per client, so recurring invoices to the same client don't need re-entry each time.
A Common Mistake
Applying the VAT rate to the wrong base amount — for example, calculating VAT on a price that already includes a discount incorrectly, or forgetting VAT applies after any deductions, not before — produces a small but real error that compounds across many invoices.
Frequently Asked Questions
Should VAT be added before or after a discount is applied?
After — VAT should be calculated on the final discounted price, not the original pre-discount amount.
Is VAT ever added twice in a supply chain?
No, in principle — the system is designed so each business reclaims VAT paid on their inputs, so only the final value added at each stage is effectively taxed.
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