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Tax & Charges Calculator

Add a percentage charge to any price, or strip one back out — with full step-by-step working. Works for VAT, GST, sales tax, service charges or any percentage levy.

TAX & CHARGES CALCULATOR

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Step-by-step solution

Tax & Charges Calculator Explained

Core concepts, classroom applications, and plain-English explanations for all audiences.

When would you actually use this?

Every time you see a price "ex-VAT" and wonder what you'll actually pay at the till. A tradesperson quotes £800 + VAT — that's £960. Or your payslip shows a gross salary of £32,000 but you want to know your actual take-home. Tax calculations are inescapable in adult life.

Worked example

"A builder quotes £1,400 + 20% VAT. What's the total, and how much is just the VAT?"

Step 1: VAT = £1,400 × 20% = £280

Step 2: Total = £1,400 + £280 = £1,680

Reverse check: £1,680 ÷ 1.20 = £1,400 ex-VAT ✓

To remove VAT from a VAT-inclusive price, always divide by 1.20 — never subtract 20%.

UK VAT rates to know

  • → Standard rate 20%: Most goods and services — electronics, clothing, restaurants, tradesperson labour
  • → Reduced rate 5%: Home energy, children's car seats, some health products
  • → Zero rate 0%: Most food, children's clothing, books, public transport

The reverse percentage mistake

To remove 20% VAT from a total, you must divide by 1.20 — NOT subtract 20%. Subtracting 20% of £120 gives £96, but £120 ÷ 1.20 = £100. The difference is £4 — and this mistake is common in business invoicing.

Good to know

How percentage charges work

Common mistake
You can't just subtract 20% to remove VAT
This trips up almost everyone. To remove a 20% charge, you must divide by 1.20 — not multiply by 0.80. They give different answers because the percentage was applied to a different base.
Correct: £96 ÷ 1.20 = £80.00
Wrong: £96 × 0.80 = £76.80
Error: £3.20 out
Why dividing works: the multiplier
Adding 20% is the same as multiplying by 1.20 (that's the multiplier). To reverse it, you divide by the same multiplier. The 20% was applied to the net price — not the gross — so you can't remove it by taking 20% of the gross.
Net × 1.20 = Gross
Gross ÷ 1.20 = Net
Multiplier = 1 + (rate ÷ 100)
Gross vs net: which price are you looking at?
Prices quoted to businesses are often net (tax not included) because businesses can reclaim the tax. Prices quoted to consumers are usually gross (tax included). Always check which one you're working with before calculating.
Net (ex-tax): £80.00
Tax (20%): £16.00
Gross (inc-tax): £96.00
Stacking charges: order matters
If two charges apply, the order changes the result. Adding 10% then 10% again is not the same as adding 20% — it's 21% total, because the second charge is applied to the already-increased price.
£100 + 10% = £110
£110 + 10% = £121
vs £100 + 20% = £120