VAT Calculator

How this is calculated

Add: inclusive = exclusive × (1 + rate)  ·  Remove: exclusive = inclusive ÷ (1 + rate)

The trap is in the removal direction. VAT was added as a percentage of the smaller excluding-VAT number, so you cannot take the same percentage off the bigger including-VAT number. At 15%: R115 − 15% = R97.75 (wrong); R115 ÷ 1.15 = R100 (right). The calculator always divides.

Quick reference at 15%

Excluding VAT	VAT (15%)	Including VAT
R100	R15.00	R115.00
R250	R37.50	R287.50
R1,000	R150.00	R1,150.00
R9,999	R1,499.85	R11,498.85

Adding VAT and removing it are different operations

Adding is intuitive: multiply the exclusive price by 1 plus the rate. Removing is where nearly every error happens, because subtracting the percentage does not work. An inclusive price already contains the tax, so it represents 100% + the rate; to recover the original you divide rather than subtract. At 15%, R1,150 inclusive is 1,150 ÷ 1.15 = R1,000 exclusive, and the VAT is R150. Subtracting 15% instead gives R977.50 and understates the base by R22.50 on every line.

The shortcut worth memorising for a 15% rate: the VAT portion of an inclusive amount is the amount × 15 ÷ 115, or roughly 13.04%. For 20% it is amount × 1 ÷ 6.

Rates and what they apply to

Rates differ by country and by product within a country. South Africa charges 15%, with a list of zero-rated basics — brown bread, maize meal, rice, vegetables, fruit, milk, eggs and paraffin among them — intended to soften the burden on lower-income households. The UK charges 20% standard, 5% reduced on things like domestic fuel, and 0% on most food and children's clothing. Ireland, Australia and New Zealand each run their own structures, and GST in some countries behaves differently again.

Zero-rated and exempt are not the same thing, and the difference matters to businesses. A zero-rated supply is taxable at 0%, so the seller can still reclaim input VAT. An exempt supply is outside the system, and the input VAT cannot be reclaimed — which makes exemption a cost rather than a benefit for the supplier.

Registration thresholds

Businesses must register once turnover crosses a threshold — R1 million in a twelve-month period in South Africa, with voluntary registration available above R50,000. Registration is not purely a burden: a registered business reclaims VAT on its inputs, which can be worth more than the administration for anyone with substantial purchases. The threshold is measured on a rolling basis, so it can be crossed without an obvious event, and late registration attracts penalties.

Invoices, and why the arithmetic must be exact

A valid tax invoice generally must show the supplier's VAT number, the date, a description, and the VAT amount either separately or with a statement that the total includes VAT at the stated rate. Without a valid invoice the buyer cannot claim the input tax, which turns a rounding shortcut into a real cost for a customer. Rounding each line separately and rounding once on the total can also produce different figures — pick one convention and apply it consistently, because auditors notice when totals do not reconcile.