Quick answer: 8.25% tax on 100 is 8.25, for a total of 108.25; the tax inside a total of 108.25 is 108.25 − 108.25 ÷ 1.0825 = 8.25.
How it's calculated
Add tax: tax = price × rate and total = price × (1 + rate). Remove tax: price before tax = total ÷ (1 + rate), and the tax is the difference.
Taking the rate off the total is a common mistake: 8.25% of 108.25 is 8.93, but the tax inside it is only 8.25.
For Gulf prices, the Saudi VAT calculator (15%) and the UAE VAT calculator (5%) open at the right rate and round to halalas and fils. US sales tax is set by each state and city, so enter the combined local rate.
Worked examples
- Add 8.25% to 100: 100 × 1.0825 = 108.25
- Remove 15% from 1,150: 1,150 ÷ 1.15 = 1,000, tax 150
- Add 5% to 240: 240 × 1.05 = 252
Frequently asked questions
Is VAT the same as sales tax?
Both are taxes on what you buy. VAT is charged at each stage of the supply chain with credits for tax already paid; US sales tax is charged once, at the final sale. For a shopper the arithmetic is the same.
What are the VAT rates in the Gulf?
Saudi Arabia 15%, Bahrain 10%, the UAE and Oman 5%. Qatar and Kuwait have not introduced VAT.
How do I find a US sales tax rate?
From the state's revenue department: the total rate is the state rate plus any county and city rates.
Why can't I subtract the percentage to remove tax?
Because the tax was worked out on the lower price. 15% off 115 gives 97.75, but the price before tax is 115 ÷ 1.15 = 100.
Is tax charged before or after a discount?
Normally after: the tax applies to the discounted price you actually pay.
Can I enter any tax rate?
Yes. Type the rate as a percentage, for example 8.25 for 8.25%.