Quick answer
Adding 20% VAT to $100 gives $120. Removing 20% VAT from $120 gives $100 net and $20 tax.
How it works
To add VAT, multiply the net price by (1 + rate). To remove VAT from a gross price, divide by (1 + rate) — you can't just subtract the percentage.
Formula
Gross = Net × (1 + rate) · Net = Gross ÷ (1 + rate)
Assumptions & limitations
- Results are rounded for display.
Frequently asked questions
Why can't I just subtract 20% to remove VAT?
Because VAT is calculated on the net price, not the gross. 20% of the gross is more than the tax that was added.