Enter a price and a tax rate to go in either direction: add tax to a net figure, or remove it from a gross figure to see the net price and the tax portion separately. Useful for invoicing, expense claims and checking that a quoted price includes what you think it does.
This is the mistake that shows up in invoices constantly. At 20% VAT, a gross price of 120 contains 20 of tax, because 100 x 1.20 = 120. Subtracting 20% from 120 gives 96, which is wrong by 4. The correct operation is net = gross / (1 + rate). The higher the rate, the bigger the error: at 25% the naive method is out by more than 6%.
VAT is charged at every stage of the supply chain, with businesses reclaiming the tax they paid on inputs, so only the value added at each step is taxed. It is normally included in displayed prices. US sales tax is levied once, at the final retail sale, and is usually added at the register - which is why an American price tag and the amount you pay differ.
Divide by 1 plus the rate. At 20% VAT, a gross price of 120 is 120 / 1.20 = 100 net, so the VAT is 20. Subtracting 20% from the gross figure gives the wrong answer.
VAT is collected at every stage of production with businesses reclaiming what they paid on inputs, and it is normally shown in the displayed price. US sales tax is charged once at the final sale and is usually added at the till.
Steuervergleich Kanton Zürich — Gemeindesteuern vergleichen (Deutsch)