VAT and sales tax, explained simply

VAT and sales tax are taxes added to the price of many goods and services. The rate depends on your country or region — it might be 5%, 10%, 20% or another figure. The maths works the same everywhere.

Adding tax

Take a price of $100 and a tax rate of 10%: the tax is $10 and your customer pays $110. Always show the price, the tax and the total clearly on your invoice.

Removing tax from a total

If a total of $110 already includes 10% tax, divide by 1.10 to get $100 before tax. In general: amount before tax = total ÷ (1 + rate ÷ 100).

Keep it visible

Whether you add tax on top or include it in your price, say so in writing. Clear invoices get paid faster and disputed less.

Try it now: the VAT / Tax Calculator adds or removes any rate in one tap.