To calculate VAT in Saudi Arabia, multiply the price before VAT by 0.15 to get the VAT, or by 1.15 to get the total. To remove VAT from a price that already includes it, divide by 1.15. The standard rate has been 15% since 1 July 2020, when it rose from 5%. The Saudi VAT calculator does both directions and rounds to the halala; this guide shows the working so you can check any invoice by hand.
The two formulas
| You have | You want | Formula |
|---|---|---|
| Price before VAT | VAT amount | price × 0.15 |
| Price before VAT | Total with VAT | price × 1.15 |
| Total with VAT | Price before VAT | total ÷ 1.15 |
| Total with VAT | VAT amount | total − (total ÷ 1.15), or total × 3 ÷ 23 |
The last line is worth remembering: VAT is 15/115 of a VAT-inclusive price, which is 3/23, or about 13.04%. It is not 15% of the total.
How to add 15% VAT: worked example
A contractor quotes SAR 2,400 before VAT.
- VAT: 2,400 × 0.15 = SAR 360.00
- Total: 2,400 + 360 = SAR 2,760.00 (the same as 2,400 × 1.15)
How to remove VAT from a price: worked example
A receipt shows SAR 1,150 including VAT, and you need the net amount for your books.
- Price before VAT: 1,150 ÷ 1.15 = SAR 1,000.00
- VAT: 1,150 − 1,000 = SAR 150.00
The common mistake is to take 15% off the total: 1,150 × 0.85 = 977.50. That is SAR 22.50 short, because the 15% was added to 1,000, not to 1,150. Always divide by 1.15.
Quick table for VAT-inclusive prices
| Total incl. VAT (SAR) | Before VAT | VAT 15% |
|---|---|---|
| 100.00 | 86.96 | 13.04 |
| 115.00 | 100.00 | 15.00 |
| 500.00 | 434.78 | 65.22 |
| 1,000.00 | 869.57 | 130.43 |
| 5,750.00 | 5,000.00 | 750.00 |
Rounding to the halala
ZATCA’s invoicing guideline says the VAT amount is rounded to the nearest halala (two decimal places), and the same rounded figures go on the VAT return. When an amount ends in exactly half a halala, normal rounding takes it up. For an invoice with many lines, work out each line, then check that the VAT total matches 15% of the net total to within a halala or two; small differences from rounding each line are normal.
The VAT on a tax invoice must be shown in Saudi riyals even when you price in another currency, converted at the Saudi Central Bank’s rate on the date the tax is due. Source: ZATCA guideline for tax invoicing and records.
What goes on the invoice
Once you have the numbers, the invoice needs to show them clearly: the amount before VAT, the VAT rate and amount, and the total. Under ZATCA’s guideline, sales under SAR 1,000 can use a simplified tax invoice; larger business sales need a full tax invoice. Simplified invoices carry a QR code with the seller’s name, VAT number, date and time, total and VAT amount. You can make that code with the ZATCA QR code generator; the VAT calculator hands its numbers straight to it. Our guide to the ZATCA QR code requirements explains what is checked.
When the rate isn’t 15%
Most goods and services in the Kingdom carry the standard 15% rate. Some supplies are zero-rated (exports of goods are the classic example) and some are exempt, such as many financial services and residential rent. If you aren’t sure which applies to what you sell, check the VAT guidelines on zatca.gov.sa or ask a tax adviser. The calculator lets you change the rate if you need to.
This guide is general information, not tax advice. Rates and rules come from ZATCA; check with ZATCA or your accountant before filing.
Frequently asked questions
How do I calculate 15% VAT on a price?
Multiply the price before VAT by 0.15 to get the VAT, then add it, or multiply by 1.15 to get the total in one step. SAR 2,400 becomes SAR 360 VAT and SAR 2,760 total.
How do I remove 15% VAT from a total?
Divide the VAT-inclusive total by 1.15 to get the price before VAT; the VAT is the difference. SAR 1,150 is SAR 1,000 plus SAR 150 VAT. Don’t subtract 15% of the total, which comes out too low.
When did Saudi VAT go up to 15%?
On 1 July 2020. VAT started at 5% in January 2018, and the Ministry of Finance raised it to 15% from 1 July 2020.
How much of a VAT-inclusive price is VAT?
3/23 of it, about 13.04%. For SAR 100 including VAT, the VAT is SAR 13.04 and the price before VAT is SAR 86.96.
Working out an employee’s final settlement too? See how end-of-service pay is calculated in Saudi Arabia.