How sales tax is added
Sales tax is a percentage of the selling price, added at checkout. The calculation is price × rate for the tax and price + tax for the total. The same method works in any currency.
Taxes charged at the register can be rounded to the cent, so a bill with many items may differ by a cent or two depending on whether the tax is rounded per item or on the whole total.
A worked example
A jacket costs 100 before tax and the combined rate is 8.25%. Tax is 8.25, so you pay 108.25. If instead you see a total of 108.25 and want to know the original price, divide by 1.0825 to get 100.00.
A common mistake is to take 8.25% off 108.25, which gives 99.32. The percentage applies to the pre-tax price, not the total, so the removal mode above uses division.
When the rate is not obvious
Online purchases, shipping, services and digital goods may be taxed differently from in-store goods. Businesses sometimes also deal with rules for selling across state or national borders.
For anything important, such as an invoice or tax return, check with your tax authority or an accountant.
About this tool
The starting rate depends on your region, but you should replace it with the rate that applies to you. The result is an estimate for general information.
Questions people ask
How do I calculate sales tax?
Multiply the price by the tax rate as a decimal. At 8.25%, a 100 item has 100 × 0.0825 = 8.25 in tax, so the total is 108.25.
How do I take sales tax out of a total?
Divide the total by 1 plus the rate. For 108.25 at 8.25%, divide by 1.0825 to get 100.00. The tax is the difference, 8.25. Subtracting the percentage from the total gives a slightly wrong answer.
What sales tax rate should I use?
Use the combined state, county and city rate for where the sale takes place. It is usually printed on receipts, and tax authorities publish lookup tools. Rates change, so check a current source.
Do all US states charge sales tax?
Not every state has a state-level sales tax, and some local areas add their own. Rates and which items are taxed vary, and some goods such as groceries or clothing are exempt or reduced in some places.
Is sales tax the same as VAT?
They are similar but not identical. Sales tax is charged once at the final sale to the customer. VAT is charged at each step of the supply chain, with businesses reclaiming what they paid. For VAT, use the VAT calculator.