How sales tax is worked out
Sales tax is a percentage added to the value of goods. To add tax, multiply the price by (1 + rate ÷ 100). To remove tax from a bill that already includes it, divide by the same number. This is the step many people get wrong: the tax is a share of the price before tax, so you cannot get back to the original by subtracting the same percentage from the total.
Sales tax, GST and VAT around the world
- Most countries charge a standard rate on goods and services, with reduced or zero rates for items like basic food, books or medicine.
- The USA has no national sales tax. Each state, and often each city, sets its own, so type your local rate.
- Canada has federal GST of 5% plus provincial taxes, and Pakistan adds provincial taxes on services.
- Businesses registered for VAT or GST can usually reclaim the tax they paid on purchases; ordinary shoppers pay it in the price.
If your bill shows a different rate, type it in the rate box. To work out a sale price first, use the discount calculator, or use the percentage calculator for any other percentage question.
Frequently asked questions
What is the sales tax or VAT rate in my country?
Standard rates include the UK 20%, UAE 5%, Saudi Arabia 15%, Germany 19%, France 20%, India GST 18% (main slab), Pakistan 18%, Australia GST 10%, New Zealand 15%, Singapore 9% and Canada GST 5% (provinces add more). US sales tax is set by each state and city, so type your local rate. Reduced and zero rates exist for many items.
How do I add sales tax to a price?
Multiply the price by 1 plus the rate. At 18%, multiply by 1.18, so a 10,000 item becomes 11,800, of which 1,800 is tax.
How do I remove sales tax from a tax-inclusive price?
Divide by 1.18, not subtract 18%. From 11,800 the price before tax is 11,800 ÷ 1.18 = 10,000 and the tax is 1,800. Subtracting 18% of 11,800 would wrongly give 9,676.
Is sales tax the same as GST or VAT?
They are close cousins: taxes charged as a percentage of the price. VAT and GST are collected at each stage of sale (the UK, EU, India, Australia and Canada use these names), while a US-style sales tax is charged only at the final sale. For working out a bill, the maths is the same.
Where can I confirm the current rate?
Check your national tax authority's website or the latest budget or finance act. Rates can change, which is why you can edit the rate here.