How to use the sales tax calculator
First choose what you want to do:
- Add tax to a price when you know the price before tax and want the total you will pay.
- Remove tax from a tax-inclusive price when you know the final price, such as a receipt total that includes VAT, and want to know how much of it is tax.
Then enter the price and the tax rate in percent and press Calculate. The result shows the net price (before tax), the tax amount and the gross price (with tax).
Formulas
Adding tax
Tax = Net price × Rate / 100, and Gross price = Net price + Tax.
For example, an item priced at 100.00 with an 8.25% sales tax has 8.25 of tax, so you pay 108.25.
Removing tax
Net price = Gross price / (1 + Rate / 100), and Tax = Gross price − Net price.
For example, a price of 120.00 that includes 20% VAT has a net price of 120 / 1.20 = 100.00, so the VAT is 20.00.
A common mistake is to take the rate straight off the gross price. Taking 20% of 120 gives 24, which is too much, because the tax was calculated on the net price, not on the total.
Good to know
- Sales tax and VAT use the same arithmetic. In the United States, prices are usually shown before sales tax; in many other countries, shelf prices already include VAT.
- US sales tax often combines state, county and city rates. Add them together and enter the combined rate.
- Amounts are rounded to the nearest cent, and the tax shown is always the difference between the gross and net price, so the figures add up exactly. Shops may round per item or per receipt, which can change the total by a cent or two.
- The result is an estimate. Some goods are taxed at reduced rates or are exempt, so check the rules where you buy.