Why R270 and R1 375 are not the same kind of price

On Sage's South African pages, Sage Accounting starts at R270 a month including VAT. Sage 50cloud Pastel starts at R1 375 a month excluding VAT. Set next to each other the numbers invite a wrong conclusion, and the register prints the basis beside every price for that reason.

The arithmetic

VAT is 15 percent. To remove it from a price that includes it, divide by 1.15. To add it to a price that excludes it, multiply by 1.15.

These are different products

Sage Accounting is a cloud product for small businesses. Sage 50cloud Pastel is Sage's desktop based accounting product, with two users and two companies in its Start plan and modules priced on top. The gap between R270 and R1 375 is mostly a difference in what is sold, with the VAT footing a smaller part of it.

A rule for reading any South African price

• Find the words including VAT or excluding VAT. If neither appears, the vendor has not said, and you should ask.
• If you are registered for VAT, compare the figures excluding VAT. You claim the VAT back.
• If you are not registered, compare the figures including VAT. That is what leaves your account.
• Do the sum again for each add on. Extra users, extra companies and modules carry the same basis as the plan.

The guide to including and excluding VAT in a software price puts every rand priced product on both footings in one table.