How to calculate VAT on an invoice
VAT (Value Added Tax) is a percentage added to the price of a product or service. Calculating it correctly is key for your invoice to be valid.
The basic formula
VAT amount = Taxable base × (VAT rate / 100). The invoice total is the taxable base plus the VAT amount: Total = Taxable base + VAT.
A practical example
If you sell a service for £500 with 20% VAT: the VAT is 500 × 0.20 = £100. The total to invoice is 500 + 100 = £600.
Common VAT rates
Standard rate (e.g. 20% in the UK, 21% in Spain): most products and services.
Reduced rate: certain goods and services such as home energy or children's items, depending on the country.
Zero rate / exempt: certain essentials, exports, or exempt services such as some education or healthcare, depending on local rules.
Invoices with several VAT rates
If an invoice includes items with different VAT rates, you need to calculate VAT separately for each group and add them up at the end. PreFactur does this breakdown automatically for you.
Calculate VAT automatically
You don't need to do these calculations by hand: when you create your invoice or quote in PreFactur, VAT and the total are calculated automatically as you fill in the details.
Ready to create your document?
It's free, no sign-up needed, and it takes less than two minutes.