# Construction VAT Calculator

Output tax, input credit, VAT payable and surcharges.

- Page: https://jianzhujisuan.com/en/vat-calc
- Category: Costing (https://jianzhujisuan.com/en/c/costing)
- Chinese version: https://jianzhujisuan.com/zh/vat-calc.md
- Data checked: 2026-10-25

## Quick result

With the default inputs (Gross amount 1000000 CNY, VAT rate 9%, Deductible input tax 50000 CNY, Surcharge rate 12%): **VAT payable 32569 CNY**

## Inputs

| Parameter | Type | Default | Unit | Note |
|---|---|---|---|---|
| Gross amount | number | 1000000 | CNY |  |
| VAT rate | number | 9 | % | 9% construction, 3% simplified, 13% goods |
| Deductible input tax | number | 50000 | CNY |  |
| Surcharge rate | number | 12 | % | 7% urban + 3% education + 2% local = 12% |

## Formula

- **Net amount**: gross ÷ (1 + rate)
- **Output tax**: gross − net
- **VAT payable**: output − input credit
- **Surcharges**: payable × surcharge rate
- **Total tax**: payable + surcharges
- **Effective rate**: total tax ÷ net

## Worked example

One million gross at 9% with 50,000 of credits: 917431 net, 82569 output tax, 32569 payable, 3908 surcharges — 36477 in total, an effective rate of 3.98%.

## Questions

### Why is the effective rate 4% when the nominal rate is 9%?

Because VAT taxes value added, not turnover — output tax less input credits is what you pay, and materials, plant and subcontracts all generate credits. The effective rate tracks how many invoices you collect: 80% coverage gives 2-4%, 40% gives over 6%. That is why paperwork is the heart of construction tax management.

### What are surcharges based on?

On the VAT actually paid, not on revenue: 7% urban construction tax in city areas, 3% education surcharge and 2% local education surcharge — 12% in total. If a credit balance means no VAT is payable, there are no surcharges either. Small-scale taxpayers get a 50% reduction in many places, so check local policy.

### When is the simplified method cheaper?

When credits cover less than about 30% of costs. Simplified charges 3% on the full amount with no credits; general charges 9% but allows them. Setting p as credits over output tax, 3% = 9% × (1 − p) gives p = 67% — so once credits fall below two thirds of output, simplified wins. Labour-only and client-supplied-material jobs usually qualify.

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Generated by BuildCalc. All calculations run in your browser; no data is uploaded. Formulas follow national standards and common trade practice; local codes govern.