Sales Tax Calculator

LAST UPDATE: September 25th, 2020

Sales Tax Calculator (Add Sales Tax)

Sales Tax Calculator (Subtract Sales Tax)

Definition – What is Sales Tax?

A sales tax is a tax that is collected for each transaction.

The tax applies to all transactions at the retail level. Unlike a VAT (value-added tax) or GST (goods and services tax), businesses who purchase items with sales tax cannot reclaim the sales tax.

Formula – How to calculate sales tax

Sales tax is calculated by multiplying the sales tax rate by the total pre-tax cost. The cost of sales tax is then added to the purchase.

Example: $75 of goods x 5% sales tax = $3.75 sales tax

$75 of goods + $3.75 = $78.95 total

Formula – How to calculate reverse sales tax

To find the sales tax from a total, divide the total amount by the sales tax rate divided by 100 and plus 1.

Example: $70 total (with sales tax) at 5% tax rate

(5% / 100) + 1 = 0.05 + 1 = 1.05

$70 / 1.05 = $66.67 cost before sales tax