VAT Calculator
Our VAT calculator allows you to conduct Value Added Tax computations in a snap. Just input your gross value, toggle VAT inclusion, and within seconds, your net amount will be on your screen.
Please fill the fields and click 'Calculate' Button to see results.
The Concept of VAT and Its Formula
VAT is a short form for Value Added Tax. As the name indicates, this form of tax is imposed on the value added to products and services at every phase of production or distribution. Companies collect this tax on the government’s behalf. Therefore, the final customer bears the cost of VAT.
The formula to calculate VAT varies according to the situation. Here is a brief explanation of various formulae used to compute value-added tax in different scenarios:
VAT Amount
VAT amount is the value added tax that is applicable to the purchase price. Its calculation is conducted through the following formula:
Amount of Value Added Tax VAT=
Gross Value × VAT Percentage / 100
VAT Inclusive Amount
VAT inclusive amount includes the sum of both the buying price and value added tax. It is determined through the following equation:
VAT Inclusive Amount=Purchase Price
VAT Percentage / 100
VAT Exclusive Amount
VAT exclusive amount is the initial cost prior to the application of value-added tax. It’s calculated according to the following formula:
Amount of Value Added Tax VAT=
VAT Inclusive Amount × 100 / 100 + VAT Percentage
VAT to Be Paid to Government
This is the net value added tax that companies have to pay to the government. Its ratio differs across products and between nations. Therefore, the following formula is used to calculate it:
VAT to Be Paid to Government = Output VAT-Input VAT
Three Common Types of Value Added Taxes
Value-added tax systems vary across the world, with different nations implementing distinct forms of VAT. The following are some of the most common types of value added taxes:
Standard Rate
The standard VAT rate that is applicable to the majority of products and services by default.
Reduced Rate
A reduced VAT rate is imposed to products and services that are classified as essentials.
Zero Rate
This VAT rate is applicable to products and services that are required to be reported even if they are not subject to value-added tax.
Calculating VAT Using Some Real-Life Examples
To grasp the concept of value-added tax and its calculation better, let’s use some real values and calculate VAT:
Example 1
Calculate the amount of value-added tax for a 100-dollar product when the standard VAT is 20%
Solution
Gross Value: $100
Standard VAT Rate: 20%
By inputting values in the VAT amount formula, the equation will be as follows:
Amount of Value Added Tax VAT =
100 x 20 / 100
Amount of Value Added Tax VAT = $20
Example 2
If a person buys essentials for 50 dollars with a reduced VAT rate of 5%, calculate the VAT and Net amount for this transaction.
Solution
The formula for solving fractions involving the division operation is as follows:
Gross Value: $50
Reduced VAT Rate: 5%
By inputting values in the first VAT formula, the expression will become
Amount of Value Added Tax VAT =
100 x 2 / 100
Amount of Value Added Tax VAT = $2.50
Let’s add the gross value to the VAT amount to get the net amount.
Net Amount = 50 + 2.50
Net Amount = $52.50
How to Calculate Value Added Tax Using Our Online VAT Calculator?
Value added tax calculations are no longer complicated or based on guessing, courtesy of our online VAT calculator. To precisely compute VAT using our tool, just follow these steps:
Start by adding the gross value of your transaction.
Toggle whether to incorporate a custom ratio of VAT or not.
Begin the calculation by tapping the ‘Calculate’ button.
Begin the calculation by tapping the ‘Calculate’ button.
Note: If you plan to add VAT, enter the percentage in the designated box.
Key Highlights of Our VAT Calculator Online Utility
Our VAT calculator does more than simply compute value added taxes. Here are a few prominent fortes of our tool.
Easy-to-Use Interface
Ability to Customize the Results
Instantaneous Output Generation
This web utility makes it easier to perform VAT calculations. The tool features an intuitive UI that makes it effortless to provide input and generate output. Therefore, regardless of your expertise level, you can use this utility and compute the ratio of value added tax in a matter of seconds.
Most online VAT calculators use a preset ratio of value added tax. But our tool takes the automated computations of VAT to the next level. The tool allows users to insert a desired value added tax ratio and personalize the result according to their use case.
Computing value added tax requires performing multiple calculations. This often increases stress. But our automated tool can conduct all the calculations at a lightning-fast pace. Therefore, embrace its power and minus the stress from your lives.