How to add sales tax
Multiply the price by the tax rate to get the tax, then add it on. Tax = price × rate. Total = price × (1 + rate).
For example, $100 at an 8.25% rate is $8.25 tax, so the total is $108.25.
How to remove sales tax from a total
To find the price before tax, divide the total by 1 plus the rate. Price before tax = total ÷ (1 + rate). A $108.25 total at 8.25% is $108.25 ÷ 1.0825 = $100.
A common mistake is to take the rate off the total instead. Taking 8.25% off $108.25 gives $99.32, which is too low, because the tax was worked out on the smaller, pre-tax price.
Which rate to use
In the US there's no national sales tax. Most states charge one, and many counties and cities add their own, so use the combined rate for where the sale happens. Combined rates commonly run from about 4% to over 10%, and a few states have no statewide sales tax.
Many other countries use VAT or GST instead, which this calculator handles the same way. At the time of writing, the UK's standard VAT rate is 20%, Australia's GST is 10%, and EU standard VAT rates run from 17% to 27%. Some goods have lower rates or none, so check with your local tax authority.
For sellers
If you sell online, you may need to collect tax based on where your buyer is, not where you are. Many platforms, like Etsy and Shopify, can work this out at checkout. Keep tax out of your own revenue and margin sums, since it isn't yours to keep.
Frequently asked questions
How do you calculate sales tax?
Multiply the price by the rate as a decimal. $50 at 7% is $50 × 0.07 = $3.50 tax, for a $53.50 total.
How do I work out the price before tax?
Divide the total by 1 plus the rate. $107 at 7% is $107 ÷ 1.07 = $100 before tax.
Why can't I just subtract the tax rate from the total?
Because tax was added to the smaller pre-tax price. Taking the same percentage off the bigger total removes too much.
Does this work for VAT and GST?
Yes. VAT and GST are added and removed the same way; only the rate changes, like 20% for UK VAT or 10% for Australian GST.
What sales tax rate should I use?
The combined rate where the sale happens: state plus any county and city tax in the US. Your state or local tax authority lists current rates.