How to use the sales tax and VAT calculator
Choose whether the price you have is before or after tax, then enter the price and the rate. The same sum works for sales tax, VAT and GST, whatever your country calls it.
Removing tax is the one people get wrong. You cannot take 20% off the total, because the 20% was added to the smaller, pre-tax figure. The calculator divides instead, which is the correct way.
The formula
- Adding tax:
total = price × (1 + rate ÷ 100) - Removing tax:
price before tax = total ÷ (1 + rate ÷ 100)
Worked example
A price of 120 that includes 20% VAT is 120 ÷ 1.2 = 100 before tax, so the tax is 20. Taking 20% off 120 would give 96, which is wrong.
Results are estimates for planning. They are not financial advice, and a lender’s own figures may differ because of fees and rounding.
Common questions
What rate should I use?
Use the rate that applies where the sale happens. Rates differ between countries and, in the United States, between states and cities.
Is VAT the same as sales tax?
Both are taxes on purchases and the arithmetic is identical. VAT is collected at each stage of supply, and sales tax only at the final sale.
How do I find the tax rate from two prices?
Divide the price with tax by the price without tax, subtract 1, and multiply by 100.