Overview
Sales tax is typically calculated as a percentage of the taxable sale price, with rates and rules varying by location.
Objective
Calculate the tax amount and total purchase price when the applicable sales-tax rate is known.
What You Need
- Taxable price
- Applicable sales-tax rate
- Calculator
Before You Start
Confirm the correct tax rate and whether the item is taxable before calculating.
How to Calculate
- Convert the tax percentage to a decimal.
- Multiply the taxable price by the tax rate.
- Add the tax to the price to find the total.
Worked Example
At a 7% sales-tax rate, tax on $50 is $3.50. The total is $53.50.
Useful Tips
- Keep the pre-tax price, tax and total on separate lines.
- Use the actual local rate rather than a generic example rate.
- Round according to the rules used for the transaction.
Common Mistakes
- Using a rate from the wrong location.
- Taxing an item that is exempt.
- Multiplying by 7 instead of 0.07.
Important Notes
Some locations combine state, regional and local sales taxes, and taxable items can differ. Use current official rules for real purchases.
FAQ
Is sales tax the same everywhere?
No. Rates and rules vary by jurisdiction.
Is sales tax included in the displayed price?
That depends on local pricing practices and law.