Net vs Gross Calculator







Formulas

To calculate Gross Amount from Net Amount:

\[ \text{Gross Amount} = \text{Net Amount} \times (1 + \text{Tax Rate}) \]

To calculate Net Amount from Gross Amount:

\[ \text{Net Amount} = \frac{\text{Gross Amount}}{1 + \text{Tax Rate}} \]

Description

Net amount is the value before adding tax (for VAT or sales tax) or after deducting tax (for income tax). Gross amount includes the tax.

For example, if you sell a product for $40 and the VAT is 25%, the gross price would be $40 + (25% × $40) = $50. If your gross pay is $50 and the income tax is 20%, your net income would be $50 - 20% = $40.

Example Calculations

Example 1: Calculating Gross Amount from Net Amount:

Gross Amount:

\[ \text{Gross Amount} = $40 \times (1 + 0.25) = $40 \times 1.25 = $50 \]

Example 2: Calculating Net Amount from Gross Amount:

Net Amount:

\[ \text{Net Amount} = \frac{$50}{1 + 0.20} = \frac{$50}{1.20} = $41.67 \]