We prove a blow-up formula for the generating series of virtual χy-genera for moduli spaces of sheaves on projective surfaces, which is related to a conjectured formula for topological χy-genera of Göttsche. Our formula is a refinement of one by Vafa-Witten relating to S-duality.We prove the formula simultaneously in the setting of Gieseker stable sheaves on polarised surfaces and also in the setting of framed sheaves on P 2 . The proof is based on the blow-up algorithm of Nakajima-Yoshioka for framed sheaves on P 2 , which has recently been extend to the setting of Gieseker H-stable sheaves on H-polarised surfaces by Kuhn-Tanaka.