How to Calculate Sales Tax
What is Sales Tax?
Sales tax is a percentage of a purchase price collected by governments. It is added to the listed price. In the US, rates vary by state and locality — from 0% (Oregon, Montana) to over 10% combined.
Step-by-Step Guide
- 1Tax amount = pre-tax price × (tax rate / 100)
- 2Total price = pre-tax price + tax amount
- 3Back-calculate pre-tax: total / (1 + rate/100)
Worked Examples
Input
$80 item, 8% tax
Result
Tax: $6.40, Total: $86.40
Input
Receipt shows $54.00 with 8% tax
Result
Pre-tax: $50.00
54 ÷ 1.08 = 50