How to add or remove tax
- Choose Add tax to a price or Remove tax from a price.
- Enter the price.
- Enter the tax rate for your country or product.
- See the net price, the tax amount and the gross price.
The formulas
| Task | Formula | Example at 18% |
|---|---|---|
| Add tax | net × (1 + rate) | 1,000 × 1.18 = 1,180 |
| Find the tax in a gross price | gross − gross ÷ (1 + rate) | 1,180 − 1,000 = 180 |
| Remove tax | gross ÷ (1 + rate) | 1,180 ÷ 1.18 = 1,000 |
The most common mistake
To remove tax from a price that includes it, you can't just subtract the tax percentage. With 18% GST included in a price of 1,180, taking 18% off gives 967.60, which is wrong. The tax was calculated on 1,000, not on 1,180. The remove tax mode divides by 1.18 to get the correct 1,000.
GST, VAT and sales tax
These are all taxes on goods and services, and the maths is the same:
- GST (goods and services tax) is used in countries including India, Pakistan, Australia, Canada and New Zealand.
- VAT (value-added tax) is used in the UK, the EU and many other countries.
- Sales tax in the United States is set by states and cities and is usually added at the checkout rather than shown in price tags.
Rates differ by country, region and product type. Many countries have reduced or zero rates for essentials such as food or medicine, and some goods are exempt. Check your tax authority's current rates for anything official, such as invoices.
Useful for
- Freelancers and small businesses writing quotes and invoices.
- Shoppers working out the pre-tax price of something for a business expense claim.
- Comparing prices between shops that show prices with and without tax.
Related tools
To apply a discount before tax, use the discount calculator. All calculations run in your browser.