The price without VAT is the price without VAT, and the price with VAT is the price with VAT, that is, the amount that the buyer actually pays. The difference between them is the tax amount: at the 23% rate, an item costing 100 zlotys excluding VAT costs 123 zlotys including VAT. The same logic applies to wages (with VAT before deductions, excluding VAT) and weight (with VAT and packaging, excluding VAT).
To sum it up
- Price without VAT = price without VAT, price with VAT = price without VAT.
- Amount before taxes: Multiply the pre-tax amount by 1.23 (or 1.08 / 1.05 at lower rates).
- Subtract net profit from gross amount: Divide gross profit by 1.23 – do not subtract 23% from gross profit.
- Consumer Always sees and pays the price before taxes and fees; company offers usually include prices excluding taxes and fees.
VAT calculator
Amount: Amount type: Net → Gross → Net VAT rate: 23% 8% 5% Calculate Enter the correct amount.
What do net price and gross price mean?
Both words come from Italian. Netto means "net", that is, the cost "cleaned" from additives - in trade: after tax deduction. Gross means "raw", the total cost with all ingredients.
In the prices of goods and services, this is, first of all, , value added tax (VAT) . The net price is the price received by the seller, while the gross price is the net amount plus VAT, which the seller remits to the tax office. In Poland, the VAT rates 23% (basic), 8%, 5%, and 0% apply—the applicable rate depends on the type of goods or services.
How to calculate gross and net price?
From net profit to gross profit
Price including VAT = price excluding VAT × (1 + VAT rate)
Example: 100 zloty net at VAT rate 23% is 100 × 1.23 = 123 zlotys gross . The tax amount is 23 zlotys. At the 8% rate, it would be 108 zlotys, and at the 5% rate, it would be 105 zlotys.
From gross profit to net profit
Price without VAT = price including VAT ÷ (1 + VAT rate)
Example: 246 zlotys gross with VAT 23% is 246 ÷ 1.23 = 200 zlotys net , and the tax is 46 zlotys. The VAT amount "built into" the gross price can also be calculated directly: gross × 23/123.
Common mistake: Subtracting 23% from the gross price. 123 PLN - 23% is 94.71 PLN, not 100 PLN. VAT is calculated on the net price, so when calculating the reverse from the gross price, you need to divide, not subtract, the percentage.
Price including all taxes and fees – which one does the buyer see?
In stores , trading in goods and services, the gross price applies . The Law on Information on Prices of Goods and Services defines price as the amount the buyer must pay the entrepreneur and explicitly states that it includes VAT and excise tax. Therefore, the price on the shelf or in the online store must include the tax.
Net prices These are primarily found in business-to-business (B2B) offers, wholesalers, price lists for entrepreneurs, and rental ads. This is because VAT payers can usually deduct VAT accrued on business-related purchases, so for them, the net amount is the actual cost. For individuals, the amount inclusive of VAT is always relevant.
В VAT invoice You will find all three values: the amount excluding VAT, the tax amount at the rate, and the amount payable including VAT.
Salary (before taxes and fees) and weight
Gross and net wages
Gross wages — is the amount stated in the contract, before any deductions. From the gross salary, the employer deducts employee-funded social security contributions (pension, disability and sickness benefits), health insurance contributions, and income tax advances. The remainder is net salary , or the amount you receive in cash. The exact amount depends on factors such as contract type, age, tax benefits, and tax rate—an HR consultant or salary calculator can provide the most accurate calculation.
For employers, the pre-tax amount reported is not the full amount of expenses—their own contributions are added to it. Therefore, it's always worth checking whether the salary is reported gross or after tax.
Gross, net and tare weight
On the packaging net weight denotes the weight of the product itself, and gross weight — the weight of the product and packaging together. The difference between them is tare weight , or the weight of the package.
Comparison of gross and net price
| Characteristic | Net price | Gross price |
|---|---|---|
| Does this include VAT? | NO | Yes |
| Sample | gross ÷ (1 + VAT rate) | net × (1 + VAT rate) |
| Example (VAT 23%) | 100 zlotys | 123 zlotys |
| Who sees this most often? | Companies, B2B clients | Consumers |
| Where does this appear? | Wholesale offers, B2B price lists, invoices | Prices in stores, receipts, invoices (for payment) |
| higher or lower | Less than (or equal to 0%) | Greater than (or equal to 0%) |
Tips on how to differentiate between gross and net profit
- Pay attention to the words «net», «+VAT» or «excluding VAT» next to the price - this means that tax must be added to the amount.
- When comparing sentences, reduce them to the same meaning. – Comparing the net price with the gross price will distort the results of the comparison.
- Check the VAT rate for a specific product or service, it is not always 23%.
- When discussing compensation, be clear about, Whether the offer is for a pre-tax or post-tax amount.
- If in doubt, please consult an accountant or tax advisor regarding corporate tax matters (rates, deductions).
Frequently Asked Questions (FAQ)
Which is higher - gross or net price?
The price shown includes VAT. Both prices are the same only for zero-rated VAT or VAT-exempt sales.
How to calculate net price from gross price?
Divide the gross price by 1 + the VAT rate, for example, by 1.23, to get the rate of 23%. Example: 123 PLN ÷ 1.23 = 100 PLN net.
Do the prices in the store include taxes and fees?
Yes. According to the Law on Information on Prices of Goods and Services, the price for the buyer includes VAT and excise duty, so you pay the full price in the store.
What does net income mean?
This is the salary after deducting insurance premiums, health insurance contributions and tax advances – the amount that is transferred to the employee’s account.
How much is 1000 PLN (net/gross)?
At the VAT rate of 23%, the net price of 1,000 PLN is 1,230 PLN gross. At the VAT rate of 8%, the net price is 1,080 PLN, and at the VAT rate of 5%, the net price is 1,050 PLN. The salary conversion rate varies depending on the contract type.
See also
- What is the difference between revenue and income?
- What is the difference between margins and markup?
- What is the difference between export and import?
- What is the difference between finance and operating lease?