How to add tax to a price
Multiply the price by the tax rate to get the tax, then add it on. Or do it in one step by multiplying by (1 + rate).
tax = price × rate ÷ 100
total = price × (1 + rate ÷ 100)
Example: a 100 item with 20% VAT.
Tax = 100 × 0.20 = 20. Total = 100 × 1.20 = 120.
How to remove tax from a total
When a price already includes tax, you can't just subtract the rate as a percentage. The tax was calculated on the smaller pre-tax price, so you have to divide.
price before tax = total ÷ (1 + rate ÷ 100)
tax = total − price before tax
Example: a receipt shows 120 including 20% VAT.
120 ÷ 1.20 = 100 before tax, so the VAT is 20.
The common mistake: 120 − 20% = 96. That's wrong by 4, because 20% of 120 is more than 20% of 100.
Sales tax, VAT and GST: what's the difference?
All three are taxes on what people buy. The rate you enter works the same way for each. The difference is how they're collected and shown.
| Tax | Used in | Shown on price tags? |
|---|---|---|
| Sales tax | United States | Usually no, added at checkout |
| VAT | UK, EU and many other countries | Yes, prices include it |
| GST | Canada, Australia, India, Singapore and others | Depends on the country |
In the US, rates vary by state, county and city, and some items like groceries are taxed at a lower rate or not at all. Look up your local combined rate before calculating. VAT countries often have a standard rate plus reduced rates for things like food, books or children's clothing.
Tips for businesses and freelancers
- Quoting a price: decide whether your quote includes tax and say so ("£500 + VAT" or "£600 inc. VAT").
- Claiming input tax: if you're VAT/GST registered, you'll usually need the tax amount from each purchase receipt. Use "remove tax" mode to pull it out of a total.
- Rounding: tax authorities have rules about rounding per line or per invoice. Small one-cent differences from this calculator are normal.
Tax rates change, and rules about what's taxable are different everywhere. Check your country's or state's official tax authority for the current rate. This calculator only does the arithmetic.
Frequently asked questions
How do I find the tax rate from two prices?
Divide the price with tax by the price without, subtract 1, and multiply by 100. For 108.25 and 100: 1.0825 − 1 = 0.0825, so the rate is 8.25%.
Should I apply a discount before or after tax?
Normally the discount comes off first and tax is calculated on the lower price. Use the discount calculator first, then enter the sale price here.
Can I enter a rate with decimals, like 8.875%?
Yes. Enter any rate, including decimals.
Last reviewed November 2026.