Gross to Net Calculator
Gross to net calculator solves multiple tax-related problems. When viewing this calculator, the tax base issue might be a bit confusing at first, you check out the "gross vs net" section below for an explanation. Our net to gross calculator is a nearly identical calculator, but with fields rearranged, so that some people might find it easier to grasp the difference between gross and net (as sometimes we think in one direction and have a problem seeing the reverse of the process).
What's the difference between net and gross?
The most straightforward answer would be that "the gross amount includes a tax amount, and the net amount doesn't". It's a bit tricky - in some cases, we talk about the gross value before the tax was deducted (income tax) and, in others - after the tax has been added (VAT, sales tax).
Take a look at our dedicated tools, the VAT calculator and the sales tax calculator. These two calculators are just linked to handling specific cases, even though they essentially perform the same calculation as this gross to net calculator.
It's important to know what the base is for the tax. For example, when talking about gross income vs net income, the tax is based on the gross value. If we earn
$100 and the tax rate is
20%, we'd earn
$80 net. The situation is different when we're dealing with VAT and sales tax. Then the tax amount is based on the net price. An example: a widget costs
$80 net, and we have
25% VAT on top of it. The tax is one-fourth of
$80, which is
$20. The gross price is then
$100. In both cases, the net price was
$80, and the gross price was
$100, but the tax was
20% in the former and
25% in the latter case.
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How do I calculate gross given net and tax from net?
To determine the gross value, you need to:
- Convert the tax from net rate from a percentage to a decimal number, e.g.,
12% = 0.12.
- Multiply the tax rate by the net price.
- Add the result to the net price.
- You've obtained the gross value by applying the tax to the net value.
How do I calculate net given gross and tax from gross?
To quickly find the net value from gross and tax, follow the steps:
- Write down the tax from gross rate as a decimal number, e.g.,
12% = 0.12.
- Multiply the tax rate by the gross price.
- Subtract the result from the gross price.
- You've found the net value. Use an online gross to net calculator if you want to verify the result.
How do I convert between tax from gross and tax from net?
tax from gross value and
tax from net value are linked by the following formulas:
tax from gross = tax from net / (1 + tax from net)
tax from net = tax from gross / (1 - tax from gross ).
What is net if gross is $500 and tax is 10%?
The net is $450. Indeed, the formula reads
net = gross × (1 - tax from gross). Plugging in the numbers, we obtain
net = $500 × (1 - 0.1) = $500 × 0.9 = 450, as claimed.