How to calculate sales tax
Add or remove tax in three steps.
Choose a direction
Select Add tax for a net price, or Remove tax for a tax-inclusive total.
Enter the amount and rate
Use the rate that applies to your jurisdiction and product.
Read the split
The result shows net, tax and gross separately so you can check the invoice.
What does this tool do?
Sales tax and VAT calculations go wrong when the direction is unclear. This calculator handles both: add tax to a net amount, or strip tax out of a gross amount, with the net, tax and total shown separately.
Frequently Asked Questions
How do I remove sales tax from a total?
Divide the tax-inclusive total by 1 + the rate as a decimal. At 20%, divide by 1.20. The difference between the total and the result is the tax.
Why is 20% of a tax-inclusive price not the tax?
The 20% applies to the net amount, not the gross. If the gross is $120, the net is $100 and the tax is $20 — 20% of $100, not 20% of $120.
Is VAT the same as sales tax?
They are similar in effect but collected differently. VAT is typically charged at each stage of the supply chain with input credits; sales tax is usually collected at the final sale.
Adding or removing sales tax
Sales tax and VAT are usually quoted as a percentage, but the number you have in front of you may already include the tax. That distinction matters: applying 20% to a tax-inclusive price overstates the tax, because the 20% applies to the net amount, not the gross.
This calculator handles both directions. In Add tax mode, the amount you enter is the net price and the tax is calculated on top. In Remove tax mode, the amount is the gross price and the net is found by dividing by 1 + the rate.
Add tax
tax = net × rate ÷ 100
gross = net + tax
Use this when a price list or invoice quotes the amount before tax.
Remove tax
net = gross ÷ (1 + rate ÷ 100)
tax = gross − net
Use this when the total already includes tax and you need the underlying amount.
A worked example
| Input | Add 20% | Remove 20% |
|---|---|---|
| Amount entered | $100.00 | $120.00 |
| Net | $100.00 | $100.00 |
| Tax | $20.00 | $20.00 |
| Gross | $120.00 | $120.00 |
The two directions should agree. If they do not, one of the amounts is being taxed twice.