Sales Tax Calculator
Add sales tax to a net price or extract the tax already included in a gross price, without inverting the percentage.
Last reviewed by the Radiatus Cloud team
Sales Tax Calculator
Calculate the sales tax on any purchase amount.
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Adding and removing are not symmetrical
The most common error in tax arithmetic is reversing addition by subtracting the same percentage. If 100 plus 20 percent tax is 120, then removing 20 percent from 120 gives 96, not 100. To extract tax from a gross figure you divide by 1 plus the rate: 120 divided by 1.20 is 100, and the tax is 20. The gap grows with the rate, and at 25 percent the naive subtraction is out by more than 6 percent of the total.
The divisor for common rates
Divide the gross by 1.05 for 5 percent, 1.075 for 7.5, 1.20 for 20, 1.18 for 18 percent GST. Alternatively multiply the gross by the rate over 1 plus the rate — for 20 percent that is one sixth, which is why UK bookkeepers extract VAT by dividing by six.
US sales tax is not one rate
A US rate is typically a state rate plus county, city and sometimes special-district rates stacked on top, which is how a single city reaches over 10 percent. Rates are set by delivery address, not seller location, for most remote sales since the 2018 Wayfair decision, and the boundaries do not follow postcodes cleanly. Anyone calculating tax for a real transaction at volume needs address-level rate data, not a single percentage.
VAT and GST behave differently
US sales tax is charged once, at the final retail sale, with resellers presenting exemption certificates. VAT and GST are charged at every stage with businesses reclaiming what they paid, so the same headline percentage produces a different compliance model. It also means European prices are quoted inclusive of tax and US prices are quoted exclusive, which is why an American shopper in Europe finds the till total matches the label.
Rounding rules matter at volume
Rounding per line item and rounding the invoice total produce different answers, and jurisdictions differ on which is required. On a single purchase this is a cent; across a million transactions it is a reconciliation problem. Fix the rule and apply it consistently.
What is taxable varies
Groceries, prescription medicines, clothing and digital goods are treated inconsistently between jurisdictions, and some states exempt clothing below a price threshold. A correct rate applied to an item that should not be taxed at all is still wrong.
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Frequently Asked Questions
How do I remove tax from a total?
Divide by 1 plus the rate. For 20 percent tax, divide the gross by 1.20. Subtracting 20 percent instead gives the wrong answer, and the error grows with the rate.
Why does subtracting the percentage not work?
Because the tax was calculated on the net price, not the gross. Removing 20 percent from 120 gives 96 rather than 100, because 20 percent of 120 is more than 20 percent of 100.
Why is there no single US sales tax rate?
Rates stack: state plus county plus city plus special districts, which is how one city exceeds 10 percent. Since the 2018 Wayfair decision, remote sales are generally taxed at the delivery address.
What is the difference between sales tax and VAT?
Sales tax is charged once at the final retail sale. VAT and GST are charged at every stage with businesses reclaiming what they paid, which is why European prices are quoted tax-inclusive.
Should I round per line or per invoice?
Pick one and apply it consistently, checking which your jurisdiction requires. The difference is a cent on one purchase and a reconciliation problem across a million.
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About This Tool
This tool runs entirely in your browser. No data is sent to any server, ensuring complete privacy. Simply use the interface above to get started — no registration or login required.
Disclaimer: This tool is provided "as is" without warranty of any kind. Results are for educational and utility purposes.
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