VAT Calculator (South Africa)

Value-Added Tax in South Africa

VAT is an indirect tax on consumption: it is added at each step of the supply chain but ultimately paid by the final consumer. In South Africa the standard rate has been 15% since 1 April 2018. Businesses with taxable turnover above R1 million in a 12-month period must register as VAT vendors; they charge VAT on what they sell (output VAT), claim back the VAT on what they buy (input VAT), and pay only the difference to SARS. That is why VAT is described as "value-added" - each business effectively pays tax only on the value it adds.

Adding and removing VAT

The arithmetic is simple once you see it written out:

Add VAT:        inclusive = exclusive × 1.15
Remove VAT:     exclusive = inclusive ÷ 1.15
VAT portion:    VAT = inclusive × 15 ÷ 115

Example: an item priced R1 150 including VAT
  exclusive = 1 150 ÷ 1.15 = R1 000
  VAT       = 1 150 × 15 ÷ 115 = R150

The mistake almost everyone makes

To find the VAT inside a VAT-inclusive price, people often take 15% of the inclusive amount. That is wrong. The 15% was added to the exclusive amount, not the inclusive one, so you must use the 15/115 fraction instead. Taking 15% of R1 150 gives R172.50, but the real VAT is R150. On a single till slip the difference is small; across a year of invoices it is the kind of error that triggers a SARS query.

Zero-rated and exempt are not the same

A set of basic foodstuffs - including brown bread, maize meal, rice, dried beans, lentils, eggs and fresh fruit and vegetables - is zero-rated, meaning VAT applies at 0% so the items stay cheaper for households. Zero-rated is different from exempt: vendors selling zero-rated goods can still claim back their input VAT, whereas suppliers of exempt items (such as certain financial services and residential rental) cannot. If you sell a mix of standard, zero-rated and exempt supplies, that distinction shapes how much you can claim.

Putting VAT on an invoice

A registered vendor's tax invoice must show the vendor's VAT registration number and break out the VAT amount separately from the price. This calculator is handy for quickly splitting a quoted figure into its exclusive and VAT parts when you are drafting an invoice or checking a supplier's. Rates and the registration threshold can change in the national budget, so confirm the current figures on the SARS website before filing.