If you invoice clients, sell products, or just try to make sense of a receipt, sooner or later you run into two numbers that look similar but mean very different things: gross and net. Mixing them up is one of the most common — and costly — mistakes freelancers make. This guide breaks it down in plain terms.
What "Net" and "Gross" Actually Mean
Net price is the price of a product or service before tax is added. It's what you, the seller, actually keep as revenue.
Gross price is the net price plus VAT — it's the final amount the customer pays.
The Two Formulas You Need
Adding VAT to a net price:
Example: 100 × 1.20 = $120
Removing VAT from a gross price: this is the one people get wrong most often — you can't just subtract 20% from the gross price.
Example: 120 ÷ 1.20 = $100
Why This Matters for Freelancers
- Quoting clients: If you say "$100" but mean net, and they assume gross, you've given away your tax margin.
- Filing taxes: Getting gross and net confused can distort your tax filings.
- Cross-border work: VAT rates vary by country (17%–27% across the EU), so the same net price produces a different gross price depending on the client's location.
Skip the Manual Math
Doing this by hand works for one invoice. It gets error-prone fast once you're juggling multiple clients, countries, and tax rates. A dedicated VAT calculator removes the guesswork — enter one number, switch between Gross and Net mode, get the other instantly.
Once your totals are right, make sure the rest of the invoice holds up too — see our invoice legal checklist for every required field.
Calculate VAT in seconds — no spreadsheets, no sign-up.
TRY THE FREE VAT CALCULATOR →