Sales Tax Calculator

How to use the sales tax calculator

Pick what you know and what you want to find:

• Add tax — you know the shelf price and want the amount you will pay. Enter the price of one item, the tax rate and, if you are buying several, the quantity.
• Remove tax — you have a total that already includes tax (a receipt, a quote or a tax-inclusive price) and want the price before tax and the tax inside it.
• Find rate — you know the amount before and after tax and want the rate that was charged.

The rate to enter is the combined rate at the place of sale. In the US, sales tax is set by states, and counties, cities and special districts can add their own rates on top, so two stores a few miles apart can charge different totals. States publish their rates and lookup tools, often by address or ZIP code; the states in the Streamlined Sales Tax agreement publish rate and boundary files for every location. Rates change, so check the current one rather than relying on a figure you remember.

Sales tax formulas

Adding tax to a price:

Taking tax out of a total that already includes it:

Finding the rate from the two amounts:

P

price before tax

r

tax rate as a decimal (8.25% → 0.0825)

Total

amount including tax

A common mistake is to remove tax by taking the rate off the total (Total × (1 − r)). That subtracts too much, because the tax was calculated on the smaller pre-tax price, not on the total. Dividing by (1 + r) is the correct reverse.

Rounding. Tax is rarely a whole number of cents, so it is rounded. The calculator rounds half-up: work to three decimals and round up when the third is 5 or more. That is the rule states in the Streamlined Sales and Use Tax Agreement follow, and it lets sellers choose whether to round the tax on each item or on the whole invoice. The two methods can differ by a few cents on the same purchase, so the result shows both when you enter a quantity.

Worked example

You buy three items at $24.99 each where the combined sales tax rate is 8.25%.

1. Subtotal: $24.99 × 3 = $74.97
2. Tax on the invoice: $74.97 × 0.0825 = $6.185025, which rounds up to $6.19
3. Total: $74.97 + $6.19 = $81.16

If the seller rounds item by item instead, each item’s tax is $24.99 × 0.0825 = $2.061675 → $2.06, and three of them come to $6.18 — one cent less.

Going the other way, a receipt total of $81.16 at 8.25% divides back to $81.16 ÷ 1.0825 = $74.974…, so the price before tax was $74.97 and the tax $6.19.

VAT, GST and tax-inclusive prices

Value-added tax (VAT) and goods and services tax (GST) are charged at each stage of the supply chain, but at the till the arithmetic is the same as sales tax. The difference you notice is that shop prices in VAT countries usually already include the tax. Use Remove tax to see what part of a tax-inclusive price is tax: at a 20% rate, a price of 120 is 100 plus 20 of tax — the tax is one sixth of the price you pay, not 20% of it.

• Not everything is taxed the same. Many places exempt or reduce the rate on items such as groceries or medicine, and some tax services differently from goods. Enter the rate that applies to what you are buying.
• Discounts usually come first. A store discount normally lowers the price that is taxed; states treat some coupons and rebates differently, so check if the amount matters. The discount calculator takes a percentage off and adds tax in one step.
• Big purchases. For a car, the tax is usually rolled into the financing along with fees; the auto loan calculator includes it in the monthly payment.