Professional services
GST and VAT Calculator
Add or remove GST, VAT or sales tax from a figure, with the gross-up done correctly.
Result
Removing tax means dividing by one plus the rate, not subtracting the rate. Taking 10% off a tax-inclusive 1,100 gives 990, which is wrong; dividing by 1.1 gives 1,000, which is right. The error grows with the rate and is one of the most common in bookkeeping.
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About this calculator
Why can I not just subtract the percentage?
Because the tax was calculated on the smaller net figure, not the larger gross one. Ten percent of 1,000 is 100, but 100 is only 9.09% of 1,100, so subtracting 10% from the gross removes too much.
Does this work for US sales tax?
The arithmetic is identical. What differs is which items are taxable and at what rate, which varies by state, county and sometimes city.
The formula
add: amount x (1 + rate); remove: amount / (1 + rate)
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