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VAT calculator — add VAT, remove VAT, withholding, margin and commission

Adding and removing VAT

VAT arithmetic has two directions, and they are not mirror images — that is where most mistakes happen.

Adding VAT is a multiplication: net × rate. A net price of 100 at 20% carries 20 of VAT and a gross price of 120.

Removing VAT is a division. To find the VAT inside a gross price of 120, divide by 1.20: 120 ÷ 1.20 = 100 net, 20 VAT. Taking 20% off the gross (120 × 0.20 = 24) is wrong because the rate applies to the net amount, not the gross.

The general formulas:

• Gross = net × (1 + rate ÷ 100)
• Net = gross ÷ (1 + rate ÷ 100)
• VAT = gross − net

Rates

The tool offers Türkiye's three rates — 20% standard, 10% reduced (most food, hotels, culture), 1% super-reduced (bread, some agricultural products, some housing). The maths is the same for any country; the UK standard rate is also 20%, and most EU standard rates fall between 17% and 27%. Use the rate printed on the invoice.

Withholding tax

Withholding is tax the payer deducts from a gross payment and remits to the tax office on the payee's behalf. In Türkiye it is 20% on freelance (self-employment) fees and on commercial rent, with 10%, 15% and 17% appearing on other payment types. Net payable = gross − withholding: on a 10,000 gross fee the withholding is 2,000 and the net 8,000. To go from net to gross, divide: gross = net ÷ (1 − rate ÷ 100).

Margin versus markup

Two ratios that are constantly confused:

• Margin is profit as a share of the selling price: (price − cost) ÷ price.
• Markup is profit as a share of cost: (price − cost) ÷ cost.

Buy at 80, sell at 100: profit 20, margin 20%, markup 25%. When a retailer says "I put 30% on it", that is usually markup; accounting reports use margin. The tool shows both.

Commission

Marketplace, agency and brokerage fees are a percentage of the gross amount. On a 5,000 sale a 15% commission is 750, leaving 4,250. If VAT is charged on the commission itself — most marketplaces do — run the commission amount through the Add VAT tab.