Net VAT due to or refundable from SARS for a tax period.
Net VAT
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Output VAT
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Input VAT
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Your breakdown
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Item
Amount
Worked example
Take a tax period with R500,000 of standard-rated sales and R200,000 of standard-rated purchases, both figures VAT inclusive. At 15 percent, the VAT portion of an inclusive amount is 15 divided by 115, about 13.04 percent. Output VAT on the sales is therefore about R65,217, and input VAT on the purchases is about R26,087. The net VAT due to SARS is output less input, R65,217 minus R26,087, which is R39,130 payable for the period. If the purchases had been larger than the sales, the input VAT would exceed the output VAT and the difference would be refundable instead. The amount you hand over is only the VAT you collected on sales, reduced by the VAT you already paid on business inputs.
Step
Amount
Output VAT (15/115 of R500,000)
R65,217
Less input VAT (15/115 of R200,000)
minus R26,087
Net VAT payable to SARS
R39,130
How it is calculated
VAT is a tax on the value you add, not on your full turnover, which is why a return nets two figures against each other. Output VAT is the 15 percent you charge customers on standard-rated sales. Input VAT is the 15 percent you were charged by suppliers on standard-rated business purchases. You pay SARS the output VAT, but you may deduct the input VAT you have a valid tax invoice for, so only the net reaches the fund. This tool treats both inputs as VAT-inclusive and extracts the 15 over 115 fraction from each, which matches how you usually see amounts on invoices. Zero-rated and exempt supplies, capital goods, bad debts and apportionment for mixed use all affect a real VAT201 return, so a working business should reconcile to its accounting records rather than rely on a two-line estimate.
Frequently asked questions
How is VAT payable to SARS calculated?
On a VAT return you declare output VAT charged on your sales and deduct input VAT paid on business purchases. If output VAT exceeds input VAT you pay the difference to SARS. If input VAT is larger, the difference is refundable. This tool treats the sales and purchase figures as VAT-inclusive and extracts the 15% VAT portion from each.
What is the fraction used to extract VAT from a VAT-inclusive amount?
To find the VAT inside a VAT-inclusive price at 15%, multiply the amount by 15 divided by 115, which is approximately 0.1304 or 13.04%. So a R115,000 inclusive total contains R15,000 of VAT and R100,000 of the net amount. This fraction is different from simply multiplying by 15%, which would overstate the VAT.
Can a business receive a VAT refund from SARS?
Yes. If your input VAT on purchases exceeds your output VAT on sales in a tax period, SARS owes you the difference. This happens most often to exporters, whose sales are zero-rated so they collect no output VAT but still pay input VAT on their costs. Refunds are paid after SARS verifies the return, which can take a few weeks.
What is the difference between zero-rated and exempt supplies for VAT?
Zero-rated supplies are taxed at 0%, so the seller charges no VAT but can still claim input VAT credits on related purchases. Exempt supplies fall outside the VAT system entirely, so no VAT is charged and no input VAT on related costs can be claimed. Basic foodstuffs and exports are zero-rated in South Africa, while financial services and residential rentals are typically exempt.