How to use the sales tax calculator

Our sales tax calculator is simple, fast, and works for any country or currency. Follow these steps to calculate your tax in seconds:

1. Enter the original price of the item before tax is applied.
2. Enter the applicable tax rate. For example: 8.875% for New York, 20% for UK VAT, 10% for Australia GST.
3. Select your currency — USD, EUR, GBP, or any other currency you need.
4. Choose the tax type: Sales Tax / GST (added on top of price), VAT, or tax-inclusive (tax is already inside the listed price).
5. Click Calculate — instantly see the tax amount and total payable price.

You can also work backwards: if you know the tax-inclusive price and the tax rate, the calculator extracts the pre-tax price and the exact tax portion for you.

Sales tax formula

Here are the three most commonly used sales tax formulas:

Tax amount = Original price x Tax rate / 100

Total price = Original price + Tax amount

Pre-tax price (from inclusive) = Total price / (1 + Tax rate / 100)

How to calculate sales tax step by step

1. Determine the original price before tax (for example, $200).
2. Determine the tax rate (for example, 10%).
3. Calculate the tax amount: $200 x 10 / 100 = $20.
4. Add it to the original price: $200 + $20 = $220 total.

How to calculate 10% sales tax

Divide the original price by 10. That is your tax amount. Add it to the original price for the total. Example: 10% of $500 = $50 tax. Total = $550.

How to calculate 20% VAT

Multiply the original price by 0.20. Add the result to the original price. Example: 20% of $300 = $60 VAT. Total = $360.

How to find the pre-tax price from a tax-inclusive amount

Divide the inclusive total by (1 + tax rate / 100). Example: if a product is listed at $110 inclusive of 10% tax, the pre-tax price = $110 / 1.10 = $100. The tax portion = $10.

Once you have calculated your discounted price, do not forget to account for taxes on your final purchase — use our discount calculator to instantly find the sale price and then bring that number here to calculate the final tax amount on your discounted purchase.

What is sales tax?

A sales tax is a consumption tax paid to a government on the sale of certain goods and services. It is typically collected by the seller at the point of purchase and then passed on to the government. Sales tax directly affects the final price a consumer pays, making it important to calculate before budgeting any purchase.

In most countries, sales tax comes in one of three forms: a straightforward sales tax (common in the US), Value Added Tax or VAT (used in Europe and many other regions), or Goods and Services Tax or GST (used in countries like India, Canada, Australia, and Singapore).

US sales tax

In the United States, there is no federal sales tax. Instead, each state sets its own rate. Five states — Alaska, Delaware, Montana, New Hampshire, and Oregon — have no statewide sales tax at all. All other states have rates ranging from as low as 2.9% (Colorado) to over 7%, and local city or county taxes can push the combined rate even higher.

Sales tax in the US applies only to retail purchases by end consumers. Business-to-business transactions are generally not subject to sales tax, which is one of the key differences from VAT systems used internationally.

US history of sales tax

Sales tax has a long and controversial history in the United States. During the colonial era, the British Crown imposed taxes on American colonists without legislative representation — a grievance that contributed to the American Revolution and the famous Boston Tea Party.

Sales tax did not become widespread in the US until the Great Depression of the 1930s, when state governments urgently needed new revenue sources. Mississippi was the first state to adopt a sales tax in 1930, and the model quickly spread across the country.

Today, sales tax is a primary funding source for state and local governments, accounting for nearly one-third of state government revenue nationally.