Articles
VAT and sales tax both affect customer prices, but they are handled differently.
VAT is commonly included in prices in many markets and can be calculated from gross price back to net price. Sales tax is often added at checkout based on location and tax rules.
For pricing work, the important question is whether the displayed price is tax-inclusive or tax-exclusive. A gross price includes tax. A net price excludes tax.
If a product is listed at 120 with 20% VAT included, the net price is 100 and VAT is 20. If a product is listed at 100 and 8% sales tax is added, the customer pays 108.
Use the VAT Calculator at /tools/vat-calculator for VAT-inclusive and VAT-exclusive calculations, and the Sales Tax Calculator at /tools/sales-tax-calculator for sales tax added at checkout.
VAT vs sales tax: what is the difference
VAT and sales tax both affect prices, but they work differently in pricing, invoices, and customer checkout.
VAT is commonly included in prices in many markets and can be calculated from gross price back to net price. Sales tax is often added at checkout based on location and tax rules.
For pricing work, the important question is whether the displayed price is tax-inclusive or tax-exclusive. A gross price includes tax. A net price excludes tax.
If a product is listed at 120 with 20% VAT included, the net price is 100 and VAT is 20. If a product is listed at 100 and 8% sales tax is added, the customer pays 108.
Use the VAT Calculator at /tools/vat-calculator for VAT-inclusive and VAT-exclusive calculations, and the Sales Tax Calculator at /tools/sales-tax-calculator for sales tax added at checkout.
vat
Sales Tax
pricing
FAQ
What is this article for?
It explains a practical topic and connects readers to useful tools where relevant.
How does it support the site?
Articles give readers background, examples, and next steps for using the tools effectively.
Can readers move to related tools?
Yes. The page is linked to the tool archive, related tools, and the site search experience.
Related reading
Sales tax vs VAT for ecommerce sellers
Learn the difference between sales tax and VAT, and why ecommerce sellers should not treat them as interchangeable pricing systems.
How to add sales tax to a price with a simple formula
A simple guide to adding sales tax to a price, with an easy formula and examples for retail and ecommerce pricing.
VAT inclusive vs VAT exclusive: what the difference means
Understand the difference between prices that already include VAT and prices that do not.
How to remove VAT from a gross price
Convert a VAT-inclusive price back to its net amount with a simple formula.
How to estimate shipping cost before pricing a product
A practical guide to estimating shipping cost before pricing a product, including carrier fees, packaging, and margin impact.
Conversion rate benchmarks for landing pages
Landing page conversion benchmarks depend on traffic source, offer intent, audience fit, and page quality.
Useful tools
Sales Tax Calculator
Use this free sales tax calculator to add or remove sales tax and estimate tax amount before setting a retail price.
VAT Calculator
Calculate net price, VAT amount, and gross price using a VAT rate.