VAT calculations

Value Added Tax (VAT) is calculated differently depending on whether amounts are inclusive or exclusive of VAT. The difference between Output VAT (charged on sales) and Input VAT (paid on purchases) determines the net amount payable to, or receivable from, SARS.

VAT Inclusive vs. VAT Exclusive

(Let's say that the VAT rate at the time was 14%)

• VAT Inclusive: When a price includes VAT, the portion of VAT is found using

$$Amount×\frac{14}{114}$$

• VAT Exclusive: When a price excludes VAT, the VAT amount is

$$Amount× \frac{14}{100}$$

Summary Tips

• Always confirm if prices are VAT inclusive or VAT exclusive.
• Apply the correct formula (14/114 or 14/100).
• Net VAT is simply Output VAT minus Input VAT.
• Practice with real examples to master these calculations.