Adding and removing tax
Worked out by this calculator, each rounded to the penny:
Add: tax = net × rate gross = net + tax Remove: net = gross ÷ (1 + rate) tax = gross − net
| Sum | Net | Tax | Gross |
|---|---|---|---|
| Add 20% to 100.00 | 100.00 | 20.00 | 120.00 |
| Take 20% out of 120.00 | 100.00 | 20.00 | 120.00 |
| Take 20% out of 59.99 | 49.99 | 10.00 | 59.99 |
| Add 5% to 49.99 | 49.99 | 2.50 | 52.49 |
| Take 7.25% out of 100.00 | 93.24 | 6.76 | 100.00 |
| Add 8.875% to 80.00 | 80.00 | 7.10 | 87.10 |
Why taking off 20% gives the wrong answer
Tax is a percentage of the price before tax. So a price that includes 20% tax is 120% of the net price, and to get back to the net you divide by 1.2. Taking 20% off 120 gives 96, not 100.
VAT, GST and sales tax
VAT and GST are added at each step of a sale and are usually included in shop prices. Sales tax is added only at the final sale and in many places is added at the till. Rates differ between countries and, for sales tax, between states and cities, and change from time to time, which is why this calculator asks you for the rate rather than guessing it.
How to read the result
- Price with tax (or without, when removing it): the headline.
- Net, tax and gross: the three parts, which always add up.
- The tax is rounded to the penny; when removing it, the net is rounded and the tax is the rest.
Common mistakes
- Taking 20% off a price that includes 20% tax: divide by 1.2 instead.
- Using the wrong rate: rates differ by country and by what is sold, so type the one that applies.
- Adding tax twice to a price that already includes it.
How to use it
- Choose Add tax to find the price with tax, or Remove tax to find how much of a total is tax.
- Type the amount and the rate that applies to you.
- Tap any figure to copy it.
Questions
How do I work out VAT backwards?
Divide the total by 1 plus the rate: for 20%, divide by 1.2. The tax is the total less that. Remove tax does it for you.
Which rate should I use?
The one that applies to what you are buying or selling where you are. This calculator doesn’t look rates up or give tax advice.
Why does the tax sometimes look a penny out?
Because each figure is rounded to the penny. The calculator makes the net and the tax always add up to the total you typed.
More calculators
Elsewhere on Yuzool
- Invoice for invoices with tax worked out
- Percentage calculator in Figure
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