Adding tax to a price
Sales tax, value-added tax (VAT) and goods and services tax (GST) are all percentages added to the price of goods and services. To add tax, multiply the pre-tax price by 1 plus the rate as a decimal. A 100 item with 8.25% tax costs 100 × 1.0825 = 108.25, and the tax portion is 8.25. In the United States, sales tax is added at the till and varies by state, county and city. In most other countries VAT or GST is already included in shelf prices.
Removing tax from a total
If you only know the tax-inclusive total, you cannot just subtract the rate from it. A common mistake is to take 8.25% of 108.25 and subtract it, which gives the wrong net price. The correct method is to divide by 1 plus the rate: 108.25 ÷ 1.0825 = 100. The tax is the difference, 8.25. Choose "Remove tax from a total" to do this correctly. It is useful for expense reports, invoices and business purchases where you need to separate the net amount from the VAT.
Working in cents
Prices and tax are rounded to the nearest cent in real transactions. This tool converts the amount to whole cents, applies the rate and rounds once, so the net price plus tax always adds up exactly to the total shown. Retailers sometimes round per item and sometimes per receipt, which can create a one-cent difference from your till receipt.
Common questions it helps answer
- How much will this cost after tax at the checkout?
- What was the price before VAT on this invoice?
- How much tax did I pay on this purchase for my records?
- What price should I charge so that the total with tax is a round number?
Limits
You must supply the rate yourself, because rates differ by place and product category (food, clothing and digital services are often taxed differently). The tool does not look up local rates and makes no network request. It provides arithmetic only and is not tax advice. For official filings, follow your tax authority's rules on rounding and rate application.