To calculate sales tax, multiply the price by the tax rate written as a decimal, then add the result to the price. At an 8.25% rate, a $249.99 item carries $20.62 in tax, for a total of $270.61. To remove tax from a total that already includes it, divide the total by 1 plus the rate.
Our free sales tax calculator does both: it adds tax to a pre-tax price, or backs it out of a tax-inclusive price. Sales tax as described here is mainly a US system, but the same math applies to VAT and GST in other countries.
How to calculate sales tax
Sales tax = Price × (Tax rate ÷ 100)
Total price = Price × (1 + Tax rate ÷ 100)Worked example: $249.99 at 8.25%
- Convert the rate to a decimal: 8.25 ÷ 100 = 0.0825.
- Tax: 249.99 × 0.0825 = 20.624, which rounds to $20.62.
- Total: 249.99 + 20.624 = 270.614, which rounds to $270.61.
- Check in one step: 249.99 × 1.0825 = $270.61.
How to remove sales tax from a total
When a price already includes tax, divide it by 1 plus the rate to get the pre-tax price. This is often called reverse sales tax.
Price before tax = Total ÷ (1 + Tax rate ÷ 100)
Tax included = Total × Tax rate ÷ (100 + Tax rate)For a $54.00 receipt with 8% tax: 54 ÷ 1.08 = $50.00 before tax, and the tax is $4.00.
The most common mistake is to subtract the tax rate from the total. That takes the percentage of the wrong number, because the tax was calculated on the pre-tax price, not the total:
| Total paid | Tax rate | Wrong: total minus rate | Right: total ÷ (1 + rate) |
|---|---|---|---|
| $54.00 | 8% | $49.68 | $50.00 |
| $108.25 | 8.25% | $99.32 | $100.00 |
| $120.00 | 20% (example VAT rate) | $96.00 | $100.00 |
How US sales tax rates work
The United States has no national sales tax. Each state sets its own rate, and many counties, cities and special districts add a local rate on top, so the combined rate depends on where the sale takes place. Rates change from time to time, so check your state's revenue department or a recent receipt for the current figure.
Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Some local governments in Alaska charge their own sales tax. States also differ on what is taxable; groceries, clothing and services are treated differently from place to place.
Sales tax vs VAT and GST
Many countries use a value-added tax (VAT) or goods and services tax (GST) instead. For shoppers, the main difference is presentation: US prices are usually shown before tax, while VAT and GST are usually included in the shelf price. To see how much of a VAT-inclusive price is tax, turn on the calculator's "Price includes tax" switch. Rates vary by country and by product, and some standard VAT rates are above 20%.
How to use the sales tax calculator
- Open the sales tax calculator.
- Enter the Price. It works with any currency.
- Set the Tax Rate with the slider, from 0% to 20% in 0.25% steps, or tap a preset: 0%, 5%, 7.25%, 8.25% or 10%.
- Leave Price includes tax off to add tax to the price. Switch it on if the price you entered already includes tax and you want to separate it.
- Read the results: Final Price with the rate applied, Price Without Tax and Tax Amount.
Rates that do not fall on a quarter-percent step, such as 6.35% or 8.875%, cannot be set exactly on the slider. For those, use the formulas above or the "What is X% of Y?" panel of the percentage calculator.
Practical tips
- Apply discounts first. In the US, sales tax is generally charged on the price after a store discount. Work out the sale price with the discount calculator, then add tax. Our guide on calculating sale prices shows the full sequence.
- Separate tax before you tip. Many people tip on the pre-tax amount of a restaurant bill. Back the tax out here, then use the tip calculator. See how much to tip and how to split a bill.
- Expect one-cent differences. Stores may round tax per item or per receipt, so your total can differ from the calculator by a cent.
- Keep business records exact. If you sell goods, record tax collected separately from revenue and follow your local tax authority's rules.
The calculator gives estimates for everyday purchases; it is not tax advice.
Frequently asked questions
How do you calculate sales tax?
Multiply the price by the tax rate as a decimal to get the tax, then add it to the price. At 8.25%, a $249.99 item has $20.62 in tax and costs $270.61 in total.
How do I remove sales tax from a total?
Divide the total by 1 plus the tax rate as a decimal. A $54.00 total that includes 8% tax was $50.00 before tax, so the tax was $4.00.
Why can't I just subtract the tax rate from the total?
Tax is calculated on the pre-tax price, so subtracting the rate from the larger total removes too much. Taking 8% off $54.00 gives $49.68, but the correct pre-tax price is $50.00.
Which US states have no sales tax?
Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax. Some local governments in Alaska still charge their own sales tax.
Is sales tax calculated before or after a discount?
In the US, sales tax is generally calculated on the price after a store discount. The treatment of manufacturer coupons differs between states.
What is the difference between sales tax and VAT?
Sales tax is charged once at the final sale and is usually added at the register. VAT is collected at each stage of production and sale, and is usually already included in the price shown to shoppers.