Frequently asked questions
How is sales tax calculated?
Multiply the pre-tax price by the tax rate as a decimal: tax = price × (rate ÷ 100). Add the tax to the price for the total. To reverse it, divide the total by (1 + rate ÷ 100).
Why does the extracted pre-tax amount not match a simple subtraction?
Because tax is calculated on the pre-tax price, not the total. Subtracting rate% of the total gives the wrong answer. The correct reverse formula divides by (1 + rate/100).
Does this handle multiple tax rates or compound taxes?
No, this calculator handles a single flat rate. If your jurisdiction applies multiple tax layers (federal + state + local), add them together and enter the combined rate.
Is sales tax the same as VAT?
They are collected differently but both add tax to consumer purchases. Sales tax is applied once at the final sale; VAT is collected at each stage of production. For the consumer, the end cost is similar at the same rate.
What tax rate should I enter?
Use your local combined sales tax rate, which varies by jurisdiction. In the US it ranges from 0% (some states) to over 10% (combined state + local). Check your state or municipality's current rate.