VAT & Service-Charge Calculator
To add VAT, multiply the net price by the rate; to remove VAT, divide the gross price by 1 plus the rate. On a restaurant or hotel bill the order matters: the service charge is normally added first, and VAT is then charged on the food plus the service charge — so VAT is effectively applied on top of the service charge. This tool does all three jobs — add VAT, reverse VAT, and a full bill breakdown with a service charge and a municipality or tourism fee — and shows every line so you can see exactly where the money goes. Everything runs in your browser; nothing you type is uploaded.
How it works
Adding VAT is the easy direction: the tax is a percentage of the net (pre-tax) price, so a £100 item at 20% VAT costs £120. Removing VAT is where people slip up. The VAT is already inside the total, so you can't just subtract 20% of the gross — you divide by 1.20. That is why £120 minus 20% gives £96, which is wrong, while £120 ÷ 1.20 gives the correct £100. The reverse-VAT mode above does this for you and reports the exact VAT element.
How VAT and a service charge stack on a bill
The most common real-world confusion is a restaurant or hotel bill. Take a menu subtotal, add a service charge, add a local municipality or tourism fee, and then charge VAT — but on what? In most places VAT is levied on the food and the service charge, so the tax base is the larger, combined figure. The bill mode shows both readings: leave “VAT applies on top of the service charge” ticked for the usual hospitality treatment, or untick it to tax the menu price alone.
Worked example — a Dubai restaurant bill
Select the Dubai preset and enter a 100 AED menu subtotal. The tool adds a 10% service charge (10 AED) and a 7% municipality fee (7 AED), then charges 5% VAT on the combined 117 AED, which is 5.85 AED. The final bill is 122.85 AED — nearly 23% more than the menu price, even though the headline VAT rate is only 5%. Seeing the layers separately explains a bill that would otherwise look like an error.
VAT fractions at a glance
When a price already includes VAT, the quickest way to find the tax is to multiply by the VAT fraction:
| VAT rate | VAT fraction of gross | ≈ % |
|---|---|---|
| 5% | 1/21 | 4.76% |
| 9% | 9/109 | 8.26% |
| 10% | 1/11 | 9.09% |
| 15% | 3/23 | 13.04% |
| 19% | 19/119 | 15.97% |
| 20% | 1/6 | 16.67% |
| 23% | 23/123 | 18.70% |
Frequently asked questions
Is VAT calculated on top of the service charge?
Usually yes. On most hospitality bills the service charge is added to the food and drink first, and VAT is then charged on the combined figure — so VAT is effectively levied on the service charge too. Toggle the checkbox in bill mode to compare that with taxing the menu price alone.
How do I remove VAT from a total?
Divide the gross by 1 plus the rate as a decimal. At 20% divide by 1.20; at 5% divide by 1.05. The difference between the total and that net figure is the VAT. Subtracting a flat percentage of the gross gives the wrong answer.
What is the VAT fraction?
It is the share of a VAT-inclusive price that is tax: 1/6 at 20%, 1/21 at 5%, 23/123 at 23%. Multiply the gross by the fraction to get the VAT in one step.
Why is my restaurant bill higher than the menu prices?
Menu prices are frequently quoted before a service charge, a municipality or tourism fee, and VAT. Once all three are added — and VAT is charged on the combined amount — the total can run 15–25% above the listed prices. Bill mode lays out each layer.
Does this tool store my figures?
No. All calculations run in your browser in JavaScript. Nothing you type is uploaded, logged, or saved once you leave the page.
New to how VAT is charged? Read the plain-English guide to adding and removing VAT, or see service charge vs VAT vs tip — how a hospitality bill really adds up.