Sales Tax Calculator

How to calculate sales tax

Sales tax is a percentage of the pre-tax price. Convert the rate to a decimal by dividing by 100, multiply it by the price to get the tax, then add the tax back on:

Tax = Price × (Rate ÷ 100)  ·  Total = Price + Tax = Price × (1 + Rate ÷ 100)

Worked example: three items at $24.99 each with an 8.25% combined rate. The subtotal is 3 × $24.99 = $74.97. Tax is $74.97 × 0.0825 = $6.19 after rounding to the cent, so the register total is $81.16. The calculator taxes the line subtotal once instead of rounding the tax on each item separately, which is how most point-of-sale systems handle a quantity of the same item.

If the price you start from is already a sale price, apply the discount first and tax the reduced amount. The discount calculator does both steps in that order, which matters: tax on $80 is less than tax on $100.

Removing tax from a total (reverse sales tax)

When you only have the total, perhaps from a receipt, an expense report or a quote that says "tax included", divide by one plus the rate to get back to the pre-tax price. The tax is whatever is left over:

Price = Total ÷ (1 + Rate ÷ 100)  ·  Tax = Total − Price

Worked example: a receipt for $54.12 at 7.5%. The pre-tax price is $54.12 ÷ 1.075 = $50.34, and the tax is $54.12 − $50.34 = $3.78.

The common mistake is to multiply the total by the rate: $54.12 × 0.075 = $4.06. That overstates the tax because it charges tax on the tax. The tax was calculated on the smaller pre-tax price, so it is a smaller share of the total than the headline rate suggests. At 7.5%, tax is about 6.98% of the tax-inclusive total. Switch the calculator to "Total incl. tax" to do this division for you.

Sales tax on $100 at common rates

The left half adds tax to a $100 pre-tax price. The right half extracts tax from a $100 total that already includes it. Scale either side linearly for other amounts: tax on $250 is 2.5 times the figure shown.

Rates are examples, not the rate for any particular place. Figures are rounded to the cent. For percentages of other numbers, the percentage calculator is quicker.

How state and local rates combine

In the US there is no national sales tax. Each state sets its own base rate, and in many states counties, cities and special districts (transit, stadium or tourism districts, for example) add their own rates on top. The rate a shopper pays is the sum of every layer that applies at the location of the sale, so two stores a few miles apart can charge different totals for the same item. Enter that combined figure in the rate field. A state rate of 6% plus a 1.5% county rate and a 1% city rate is 8.5%, not 6%.

Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. That does not always mean zero tax at the till. Alaska lets local governments levy their own sales taxes, and some of the others tax specific things such as meals, lodging or resort-area purchases.

We don't publish a state-by-state rate table here because rates and local add-ons change during the year and a stale number is worse than none. The authoritative source is your state's department of revenue (sometimes called the department of taxation or the comptroller). Most offer an address-based rate lookup. They also publish which goods are exempt or taxed at a reduced rate, since groceries, prescription drugs and clothing are treated differently from state to state.

For online orders, the rate is generally based on the delivery address rather than the seller's location, so the same order shipped to two addresses can carry different tax.

VAT and GST-inclusive prices

Outside the US, consumption tax is usually a value-added tax (VAT) or goods and services tax (GST), and shelf prices normally include it. The arithmetic is the same as reverse sales tax, so use "Total incl. tax" mode to find the net price and the tax inside it.

• At a 20% VAT rate (the UK standard rate), a 120.00 price includes 20.00 of VAT on a net price of 100.00. VAT at 20% is one-sixth of the gross price, not one-fifth.
• At a 10% GST rate (Australia's rate), a 55.00 price includes 5.00 of GST on 50.00, one-eleventh of the gross.
• To add VAT to a net invoice amount, use "Price before tax" mode exactly as you would for US sales tax.

The calculator shows a dollar sign, but the math is currency-neutral. Many countries also have reduced rates for food, books or energy, so check which rate applies to the item.

Rounding and checking a receipt

Tax is rounded to the nearest cent, and where the rounding happens can move a total by a cent or two. One item at $0.33 with 7% tax carries $0.02 of tax. Three of them taxed together come to $0.99 with $0.07 of tax. Taxing each one separately would give 3 × $0.02. Neither is wrong; it depends on whether the system taxes per item, per line or per invoice.

To check what rate a receipt actually used, divide the tax by the pre-tax subtotal. A $40.00 subtotal with a $43.00 total implies ($43.00 − $40.00) ÷ $40.00 = 7.50%. If that doesn't match the rate you expected, some items may be exempt or taxed at a different rate, or the receipt may include a separate fee.

Business owners pricing products should set prices on the pre-tax amount. Sales tax is collected for the state, not earned. The margin calculator works on pre-tax prices for that reason.