VAT Split (Tax Out of a Total)
Split a tax-inclusive total into the net amount and the tax portion.
Enter your numbers
Formula
How the calculation works
A tax-inclusive total already contains the tax, so the base cannot be recovered by subtracting the rate. The total equals the base multiplied by one plus the rate, which means the base is the total divided by that factor. At 15%, 138 divides by 1.15 to give 120, and the remaining 18 is the tax.
The gap between dividing and subtracting widens as the rate rises. At 10% the naive subtraction of 13.80 against the correct 12.55 is small; at 25% the two answers differ by several units on the same total. The error is not random, it always overstates the tax, because the percentage was taken off a number that already included it.
The split is exact and reversible. Base times one plus rate returns the total to the last decimal, so a shop that adds tax and an accountant who removes it will always meet. That reversibility is the property that makes the inverse method trustworthy, and it is why the naive subtraction cannot be rescued by a small correction.
Common mistakes
- Subtracting the rate from the total instead of dividing by one plus the rate, which overstates the tax by the rate applied to itself.
- Applying the split to a total that never had the tax added, which produces a base lower than the real selling price.
- Mixing rates. A total that carries a reduced rate on part of the bill cannot be split with one rate; each line needs its own.
When to use it
- Use it to recover the net figure and the tax line from a receipt or a tax-inclusive price, for bookkeeping or for checking a bill.
- It is not the tool for adding tax to a net price; use the add tax calculator for that direction, since the arithmetic runs the other way.
Worked example
A 138 total at 15% tax is 120.00 net plus 18.00 tax.
Common questions
Can I just subtract 15% from the total?
No. The total is the net times 1.15, so you divide to get back to the net. Subtracting gives 117.30, which is wrong.
Does it work for any rate?
Yes, for any rate below 100%. At 100% or more the sum is meaningless, so the tool stops rather than guess.
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