Compare a quote's cost to a customer who can claim VAT versus one who cannot.
VAT-inclusive price
—
VAT
—
Registered customer cost
—
Non-registered cost
—
The same quote, two very different costs
Quote R10,000 plus VAT to two customers and one of them effectively pays R10,000 while the other pays R11,500. The difference is whether the buyer is registered for VAT. This calculator makes that gap visible. You enter a VAT-exclusive net price, and it shows the VAT added, the inclusive price a consumer pays, and the effective cost to a VAT-registered business that can claim the VAT back. It is a tool for understanding how the same number lands differently depending on who is on the other side of the invoice.
This matters most when you sell to a mix of businesses and consumers, or when you are deciding how to display prices. A builder quoting a homeowner and a builder quoting a property company are, in real terms, charging two different amounts even when the quote is identical.
Why a registered buyer pays less
VAT works as a chain. When a VAT-registered business buys something for its enterprise, the VAT it pays is input VAT, which it claims back from SARS, the South African Revenue Service, against the output VAT it charges its own customers. So the VAT washes out, and its true cost is the net, VAT-exclusive price. A consumer or any non-registered buyer has no such claim, so the VAT is a real, final cost and they bear the full inclusive price. The rate this calculator applies is the standard 15 percent, which stayed at 15 percent for the period despite proposed increases that were later withdrawn. Confirm the current rate with SARS, but the mechanism, registered buyers reclaim, consumers do not, is the stable idea.
A R10,000 net quote to two buyers
Take a net price of R10,000. VAT at 15 percent is R1,500, so the inclusive price is R11,500. A VAT-registered customer pays R11,500 to you but reclaims the R1,500 from SARS, leaving a real cost of R10,000. A non-registered customer pays R11,500 and reclaims nothing, so their real cost is the full R11,500. The R1,500 is the entire difference, and it is exactly the VAT.
| Buyer | Pays | Reclaims | Real cost |
|---|
How this should shape your pricing
If most of your customers are registered businesses, quoting VAT-exclusive prices is honest and competitive, because they see past the VAT anyway. If you sell mainly to consumers, the inclusive price is what they judge, so a 15 percent jump on registration day is a real price rise they feel. A common mistake by a newly registered small business is forgetting that the VAT it now adds is not extra income; it belongs to SARS and must be paid over. The flip side, often overlooked, is that registration also lets you claim input VAT on your own purchases, which can offset the sting, especially if you buy a lot of taxable supplies.
Who this comparison is for
It helps any business owner near the VAT threshold deciding whether to register, and any trader setting prices for a mixed customer base. A practical tip: if you serve consumers and are weighing voluntary registration, model whether the input VAT you could reclaim outweighs the effective price increase your consumer customers will see. For business-only customers, registration is usually close to neutral on price and simply lets everyone reclaim cleanly. Run a few net prices through the tool to feel how the R1,500-per-R10,000 wedge scales with your typical ticket size.
If both buyers pay R11,500, how is the cost different?
Because the registered buyer gets the R1,500 back from SARS on its next VAT return, so it is out of pocket only R10,000 once the cycle completes. The consumer never recovers the R1,500. The cash they hand over is the same on the day; the lasting cost is not.
Can a registered business always claim the full input VAT?
Not always. Input VAT can only be claimed on purchases used for making taxable supplies, and some items, such as entertainment and most passenger vehicles, are specifically blocked from input claims. So the clean wash-out assumed here holds for ordinary business inputs but not for those denied categories. Check the input-VAT rules before assuming every purchase qualifies.