VAT / GST / Sales Tax Calculator

Whether it's called VAT, GST or sales tax, it's a percentage added to a price, and the maths of taking it back out trips people up. Subtracting 7.5 percent from a total doesn't give you the pre-tax price. Enter an amount and a rate and this tool adds tax on, or strips it out correctly, showing the price before tax, the tax itself and the total.

How to use it

1. Choose whether you're adding tax to a price or removing it from a total.
2. Enter the amount.
3. Enter the tax rate as a percentage.
4. Read the price before tax, the tax and the total.

When it helps

• Working out the tax on an invoice.
• Finding the pre-tax price from a receipt total.
• Comparing prices where tax rates differ.
• Checking that a shop charged the right amount.

Good to know

• Always look up the right rate for your country and product type; reduced rates exist for some goods.
• If one receipt has items at different rates, calculate each separately.
• Rounding can differ by a cent or kobo from a shop's till.

The two calculations

To add tax, multiply the price by one plus the rate: 100 at 7.5 percent becomes 107.50. To remove tax from a total, divide by one plus the rate: 107.50 divided by 1.075 gives back 100. Subtracting 7.5 percent of 107.50 gives 99.44, which is wrong, and is the commonest mistake.

The tool does both calculations and shows the tax portion separately, which is useful for invoices.

Worked example: an invoice

You sell a service for 250,000 and need to add 7.5 percent VAT. The tax is 18,750 and the invoice total is 268,750. If a customer pays 268,750 and you need the net amount, choose Remove tax and you get 250,000 back, with 18,750 as tax.

For a basket with several rates, calculate each line separately and add the results.

VAT, GST and sales tax compared

VAT and GST are charged at each stage of a supply chain, with businesses reclaiming the tax they pay, so the final consumer bears it. Sales tax is charged only at the final sale. In practice, the calculation on a receipt is the same: a percentage on the price.

Rates vary widely, from about 5 to 27 percent in many countries, and many places have reduced rates for food, books or medicines.

Keeping records

Businesses must usually show the tax separately on invoices and keep records for several years. Keep the net amount, the rate and the tax amount for each sale, and check the rules where you operate.

If you're unsure which rate applies, ask your tax authority or an accountant. This tool does the arithmetic and doesn't determine which rate is correct.

Questions