Sales tax is a percentage added to a purchase: the tax is the price times the rate, and the total is the price plus that tax — total = price × (1 + rate/100). The handy reverse trick is to recover the pre-tax price from a tax-included total by dividing instead of multiplying: price = total / (1 + rate/100). The exact same arithmetic covers VAT and GST in other countries — only the name and rate differ. Just remember to apply discounts before tax, since tax is normally charged on the final price.
Reviewed: June 20, 2026 · Author: Naveen P N, Founder — AI Calculator · Verified against: standard percentage sales-tax arithmetic.
The sales tax equations
To add tax, multiply the price by the rate as a decimal for the tax, then add it on — or multiply the price by (1 + rate/100) to get the total in one step. To strip tax out of a total, divide by (1 + rate/100); the difference is the tax that was included. You can also recover the rate from a price and total: rate = (total/price − 1) × 100. For several items, sum the prices first, then tax the subtotal once.
Worked example — a purchase
Scenario: You buy an item priced at 50 in a region with an 8% sales tax. What is the tax and the total?
The tax is 4.00 and you pay 54.00 in total. At a 5% rate the tax would be 2.50 (total 52.50); at 10% it's 5.00 (total 55.00). Working backward, a 54.00 receipt total at 8% means the item was 50.00 before tax — useful for extracting the net amount from a tax-inclusive price. If the item had a 10% discount first, you'd tax 45 instead of 50, giving 3.60 tax and a 48.60 total.
Frequently Asked Questions
tax = price × rate/100; total = price + tax. 50 at 8% → tax 4.00, total 54.00.
price = total / (1 + rate/100). 54 at 8% → 50.00. The tax was total − price.
Same arithmetic (tax = price × rate); they differ in where in the supply chain they're collected.
Usually yes — discount first, then tax the reduced amount. 50 −10% = 45, +8% = 48.60.
Sum the prices, then tax the subtotal once: total = subtotal × (1 + rate/100).