Taking the VAT back out of a price
A gross price already contains its VAT, and getting it back out is not “subtract 23%” — that is the single most common arithmetic error people make with VAT, and it gives you the wrong answer every time. This page does it correctly, shows the fraction, and explains why the obvious method fails.
Your figures
The price with VAT already included.
VAT at 23%
€18.70
- Before VAT
- €81.30
- Including VAT
- €100.00
The working
- Price including VATthe amount you entered€100.00
- VAT already in the price€100.00 × 23⁄123 — the same answer as dividing by 123 and multiplying by 23€18.70
- Price before VAT€100.00 − €18.70€81.30
- Rounded to 2 decimal places, half up. Ireland does not publish a rounding rule for VAT that we were able to find, so this is our stated convention rather than a rule — it can differ from an invoice by at most one cent.
Why subtracting the rate does not work
The instinct is to take the percentage off. If the price includes 23% VAT, take 23% off the price. It feels like it should work and it never does, and the reason is that the percentage was never applied to the number you are holding.
VAT is charged on the net price. The gross is the net plus that charge, so the gross is a bigger number than the one the percentage was calculated on. Taking the percentage off the bigger number takes off too much.
| Method | Net it gives | Add the VAT back | Does it reconcile? |
|---|---|---|---|
| Subtract the rate from the gross | €94.71 | €116.49 | No — it lands short of the price you started with |
| Multiply the gross by the VAT fraction | €100.00 | €123.00 | Yes — exactly €123.00 |
The gap on €123.00 is small enough to shrug at and it scales linearly. On a year of invoices it is not small, and it is in the direction that costs you: the wrong method understates the net, which understates the turnover you report and overstates the VAT you think you are holding.
The correct sum, three ways of writing it
All three are the same arithmetic. Use whichever one you can remember.
- The fraction. The VAT in a gross price is the rate over one hundred plus the rate. At 23% that is 23 ⁄ 123 of the gross.
- The divisor. Divide the gross by one plus the rate as a decimal — 1.23 at the standard rate — and you have the net. The VAT is what is left.
- The multiplier. Multiply the gross by the percentage in the third column below. It is the shortest to do in your head and the easiest to get wrong, because it is the one where the number is not the rate.
| Rate | Fraction of the gross | As a percentage | Divide the gross by |
|---|---|---|---|
| 23% | 23 ⁄ 123 | 18.7% | 1.230 |
| 13.5% | 13.5 ⁄ 113.5 | 11.89% | 1.135 |
| 9% | 9 ⁄ 109 | 8.26% | 1.090 |
| 4.8% | 4.8 ⁄ 104.8 | 4.58% | 1.048 |
| 0% | none | 0% | 1.000 |
Which figure this calculator rounds, and why it matters
Three numbers, only two of them independent. This calculator keeps the amount you typed exactly as you typed it, rounds the VAT, and takes the third figure as the sum or the difference. So the net and the VAT always add back up to the gross, in both directions, with no cent unaccounted for.
The alternative convention — round the net, take the VAT as the difference — reconciles just as well and produces a VAT figure one cent different on a small proportion of inputs. Neither is more correct; the methodology page explains why this site had to choose at all, which is that no Irish rounding rule for VAT was located.
When you should not use this
A gross figure that covers more than one rate cannot be reversed as a whole. A grocery receipt with standard-rated cleaning products and zero-rated bread has no single rate to reverse at, and running the total through at 23% produces a confident, meaningless number. Reverse each line, or read the VAT total the receipt already gives you.