What this calculator does
When a price already includes tax, this finds the price before tax and how much of the total is tax. Use it for a US receipt, an expense report, or a price that includes GST or VAT, such as in Canada, Australia, New Zealand, India or the UK. It also checks the rounding: it finds the whole-cent price that really produces your total, which a simple division can miss.
To add tax to a price or find a rate from two prices, use the sales tax calculator.
How it's calculated
Tax = total − price before tax
Tax fraction of the total = rate ÷ (100 + rate)
The tax fraction is what the UK's HMRC calls the VAT fraction. At 20% it's 20/120, or 1/6, so a VAT-inclusive price is one-sixth VAT. If two taxes are each charged on the pre-tax price, such as a state and a city rate or a federal and a provincial rate, add the rates first.
Why you can't just take the rate off the total
Tax is worked out on the smaller, pre-tax price. Taking 7.25% off $107.25 gives $99.47, but 7.25% tax on $99.47 is only $7.21, for a total of $106.68. The right answer is $107.25 ÷ 1.0725 = $100.00.
Worked example with rounding
A receipt shows $54.99 at 8.875%:
Check: 50.51 × 8.875% = 4.4828 → $4.48 tax · 50.51 + 4.48 = $54.99 ✓
Sometimes no whole-cent price works. At 8.875%, a pre-tax $40.50 gives $44.09 (tax $3.594, rounded to $3.59) and $40.51 gives $44.11 (tax $3.595, rounded to $3.60), so no price gives exactly $44.10. If a total can't be reached, the store may have rounded per item or used a different rate, and the calculator tells you the nearest prices.
Tax fractions for common rates
| Rate | Divide total by | Share of the total that's tax |
|---|---|---|
| 5% | 1.05 | 1/21 = 4.76% |
| 6% | 1.06 | 3/53 = 5.66% |
| 7% | 1.07 | 7/107 = 6.54% |
| 8% | 1.08 | 2/27 = 7.41% |
| 10% | 1.10 | 1/11 = 9.09% |
| 13% | 1.13 | 13/113 = 11.50% |
| 15% | 1.15 | 3/23 = 13.04% |
| 20% | 1.20 | 1/6 = 16.67% |
Limitations
- Rounding rules differ. Some sellers round tax on each line and some on the whole bill, so a multi-item receipt can be off by a cent or two.
- If some items are taxed at a lower rate or not at all, one rate won't fit the whole receipt.
- Some taxes are charged on top of another tax rather than on the pre-tax price. In that case adding the rates isn't exact.
- Rates change, so check your state, province or country's tax authority for the current one.