Sales Tax Calculator

What this tool is used for

• Working out the tax on a purchase before deciding whether it fits a budget.
• Adding tax to a quoted pre-tax price to see the real total.
• Comparing the same purchase across two jurisdictions with different rates.
• Backing the tax out of a tax-inclusive total for an expense claim.
• Checking an invoice's tax line against the rate that should apply.

Frequently Asked Questions

How do I remove tax from a gross price?

Divide, do not subtract the percentage. At 20% tax, a £120 gross price is £120 ÷ 1.2 = £100 net. Subtracting 20% of 120 gives £96, which is wrong — the tax was calculated on the net, not the gross.

What is the difference between sales tax and VAT?

Sales tax is charged once, at the final retail sale. VAT is charged at every stage with businesses reclaiming what they paid, so the same total reaches the government but the collection is distributed and self-policing.

Why are US rates so complicated?

Because state, county, city and special districts each add their own, producing thousands of distinct combined rates that change frequently. Rates can differ between two addresses on the same street, which is why lookup is address-based.

Is tax shown in the displayed price?

It depends on the market, and this trips up international shoppers constantly. EU and UK prices are quoted tax-inclusive by law for consumers; US prices are almost always quoted before tax, which is added at the till.

How should rounding be handled?

Normally to the nearest cent per line item, but jurisdictions differ on whether tax is computed per line or on the invoice total. The two can differ by a cent, which matters for reconciliation even though it looks trivial.

Where should rounding happen on a multi-line invoice?

It depends on the jurisdiction — some require tax computed and rounded per line, others on the invoice total. The two differ by a few cents, and tax authorities do care which one you used.

What is a tax-inclusive price and how is the tax extracted?

A price with tax already in it. Divide by one plus the rate to recover the net — a 20% inclusive price of 120 is 100 net, not 96. Subtracting 20% is the most common error in this calculation.

Common errors and gotchas

• Using a state rate alone, when county and city rates often stack on top of it.
• Adding tax to a tax-inclusive price, which double-counts it.
• Assuming every item is taxable. Groceries, medicine and services are frequently exempt or rated differently.
• Rounding per line and per total inconsistently, which produces a penny difference against an invoice.
• Treating the rate as fixed by the seller's location when destination-based rules apply.