Formulas
Net price = gross price ÷ (1 + rate) · Tax = gross − net Margin after tax = (net price − cost) ÷ net price Gross price for a target margin = cost ÷ (1 − margin) × (1 + rate)
Standard rates used (checked 28 September 2026)
- United Kingdom: 20% standard, 5% reduced. Source: GOV.UK VAT rates.
- European Union: each country's standard rate, from 17% (Luxembourg) to 27% (Hungary). Source: Your Europe: VAT rates.
- Australia: GST 10%. Source: ATO: how GST works.
- Canada: GST 5%; HST 13% (ON), 14% (NS), 15% (NB, NL, PE); GST plus provincial sales tax in BC, MB, SK and QC. Source: Canada Revenue Agency: GST/HST rates. Provincial sales taxes other than HST are separate from GST; the combined rate is shown for convenience.
Selling in Germany? Use the Mehrwertsteuer-Rechner (brutto ↔ netto) in German.
Questions
Do I work out margin on the price with or without VAT?
Without. VAT, GST and HST are collected for the government, so your margin is the net price minus cost, divided by the net price. A £120 VAT-inclusive price at 20% is £100 net; with a £60 cost that's a 40% margin, not 50%.
How do I take VAT out of a price?
Divide by 1 plus the rate. At 20%, £120 ÷ 1.2 = £100 net and £20 VAT. Don't subtract 20% of the gross price: that gives £96, which is wrong.
What price do I charge for a 40% margin including VAT?
Net price = cost ÷ (1 − 0.40), then add VAT. A £60 cost needs £100 net, so £120 including 20% VAT.
What if I'm not registered for VAT or GST?
Then you don't charge it and you can't reclaim it on your costs. Enter your prices and costs as you pay them and set the rate to 0.