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Does the price from the selling-price calculator include VAT?

No. The result is a pre-tax price, the net amount that belongs to you. If you charge VAT, add it as a second step at the rate that applies to you: a net price of 100 with 15 entered as an example rate becomes 115 on the product page.

Published · 2 min read

Why the calculator works before tax

The VAT you collect from a customer is neither your income nor your cost; it is money you collect and pass on. Your profit and margin are measured against the price before tax. That is why the Selling-price calculator states plainly that prices exclude tax. It keeps the maths clean: costs, fees and margin all sit on the amount you keep.

Two steps, in order

  1. Solve the net price in the selling-price calculator from cost, shipping, fees and margin.
  2. Carry the result to the VAT calculator, choose add tax, and enter the rate that applies to your business.
  3. The gross price is what the customer sees on the product page if you show prices including tax.
Worked example

Cost 60, shipping 12, fixed fee 3, fees 5%, margin 20%: net price 100, profit 20.

Adding tax at 15 as an example rate: tax 15, gross price 115.

Profit stays at 20, because the tax is not part of your income.

The mistake that inflates your price

Some sellers enter the tax rate in the percentage fee field, thinking it is 'taken out of the price'. Try it with the same example: fees of 5% plus 15 become 20%, and the price jumps to 125 before any tax is even added. You have treated tax as a cost and loaded a margin on top of it, producing an inflated price that can push customers away.

When to take extra care

  • If a platform charges commission on the tax-inclusive price, the real commission is a little higher than the calculator assumes. Add the commission on the tax amount to fixed fees.
  • If you are not registered for VAT, do not add it at all; the net price is your final price.
  • Confirm the rate that applies to you with an official source or your adviser. The tools here only calculate with the rate you enter.

Common questions

Should I strip VAT from a competitor's price before comparing?

Yes, if their price includes tax and yours is net. Extract the net from their price with the VAT calculator, then compare.

Does VAT I pay on purchases count as cost?

That depends on your tax position. If you reclaim it, leave it out of cost; if you cannot reclaim it, it is part of your cost.