VAT Calculator: How to Calculate and Extract VAT Correctly (With Formulas)

September 2026 • Invoice Generator • Yellownex

Adding 20% on top of a price is easy. But extracting VAT from a price that already includes VAT is where most freelancers make mistakes. If you calculate it wrong, you either lose money or overcharge your client.

This guide shows you the correct way to add and extract VAT, with simple formulas.

What is VAT? Inclusive vs Exclusive

VAT Exclusive: Your net price without tax. Example: $100 + VAT.
VAT Inclusive: Your gross price with tax already inside. Example: $120 includes VAT.

🧮 Live VAT Calculator

Add VAT

Extract VAT

Amount VAT Rate 20% - UK, Turkey 19% - Germany 18% - Turkey 10% 8% 5% Custom Rate

Net Amount-

VAT Amount-

Gross Amount-

How to Calculate VAT (Add VAT to Net Price)

VAT Amount = Net Price x (VAT Rate / 100)
Gross Price = Net Price + VAT Amount

Example - 20% VAT: £500 net x 0.20 = £100 VAT. Gross = £600
Example - 19% VAT: €1000 net x 0.19 = €190 VAT. Gross = €1190

How to Extract VAT (Remove VAT from Gross Price)

⚠️ Common mistake: If price is €1190 incl. 19% VAT, VAT is NOT €226.10 (19% of 1190). You must extract it correctly.

Net Price = Gross Price / (1 + VAT Rate / 100)
VAT Amount = Gross Price - Net Price

Extract 20% from £600: 600 / 1.20 = £500 Net. VAT = £100
Extract 19% from €1190: 1190 / 1.19 = €1000 Net. VAT = €190

VAT Rate	To Add VAT	To Extract VAT
20% (UK, Turkey)	Net x 1.20	Gross / 1.20
19% (Germany)	Net x 1.19	Gross / 1.19
18% (Turkey)	Net x 1.18	Gross / 1.18
10%	Net x 1.10	Gross / 1.10

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FAQ

What is difference between VAT inclusive and exclusive?
Exclusive means tax will be added on top. Inclusive means price already contains tax.

How to extract 20% VAT?
Divide gross by 1.20 to get net. Subtract net from gross to get VAT amount.