VAT Calculator Nigeria — 7.5% Standard Rate (Add / Strip)

Why 7.5% is Trickier Than It Looks

Nigeria's 7.5% VAT sits in an awkward spot for mental arithmetic. A 10% or 20% rate can be halved or doubled in your head; 7.5% cannot, so people reach for shortcuts that do not hold. The multiplier is 1.075, and this awkwardness compounds across invoices and price lists.

The Correct Formula: Multiply by 1.075, Then Divide to Extract

To add VAT to a net figure, multiply by 1.075. To extract VAT from an inclusive amount, divide by 1.075. Example:

• Net invoice: ₦100,000
• Add 7.5% VAT: ₦100,000 × 1.075 = ₦107,500 gross
• Extract VAT from ₦107,500: ₦107,500 ÷ 1.075 = ₦100,000 net, with ₦7,500 VAT

The Most Common Mistake: Subtracting 7.5% Directly

A frequent error is to subtract 7.5% from a VAT-inclusive total. On ₦107,500, this yields:

• Wrong method: ₦107,500 − 7.5% = ₦99,437.50
• Correct net: ₦100,000
• Error per invoice: ₦562.50 (a 0.56% shortfall)

Across a month of invoices, these ₦562.50 errors accumulate into audit findings. Nigeria's VAT rose from 5% to 7.5% in 2020; old spreadsheets using ×1.05 still circulate.

Zero-Rated, Exempt, and Where the Tool Stops

Zero-rated items — basic food, medicines, educational materials and exports — are taxable at 0%, so a registered supplier still recovers input VAT on its costs. Exempt supplies sit outside the system and that recovery is lost, which is why the two words are not interchangeable on a return. This tool computes arithmetic only: it does not classify a supply, handle VAT withheld by government agencies or large companies, or cover registration and filing. Always confirm rates and classification with the FIRS or a tax adviser. See also the salary calculator and income tax calculator.