General guidance, not tax advice. Sales tax rates and rules are set locally and change often — confirm the rate that applies to your sale with the relevant tax authority.
How to add sales tax to a price
Sales tax is charged on top of your price and collected on behalf of the government. To add it, multiply the net price by the tax rate and add the result back on:
Tax = Net price × (Tax rate% ÷ 100)
Total = Net price + TaxA $100 item at an 8% rate carries $8 of tax, for a $108 total. Switch the calculator to Add tax to do this live.
How to remove sales tax from a total
This is the one people get wrong. If a receipt shows $108 including 8% tax, you can't just take 8% of $108 — that over-counts. You divide instead:
Net price = Total ÷ (1 + Tax rate% ÷ 100)
Tax = Total − Net price$108 ÷ 1.08 = $100 net, leaving exactly $8 of tax. The Remove tax tab handles this — handy for bookkeeping when a price was quoted tax-inclusive.
Sales tax in the United States
There is no federal sales tax in the US. Tax is set at the state and local level, so the combined rate depends on where the buyer is. A handful of states have no statewide sales tax at all:
| State | Statewide base rate |
|---|---|
| California | 7.25% |
| Texas | 6.25% |
| New York | 4.00% (+ local) |
| Colorado | 2.90% (+ local) |
| Alaska, Delaware, Montana, New Hampshire, Oregon | No state sales tax |
Local city and county taxes stack on top of the state rate, so the rate you actually charge can be a percent or two higher than the figures above. For the full picture, see our guide to sales tax on invoices.
What about VAT and GST?
VAT (UK, EU) and GST (Australia, Canada, and others) work on the same arithmetic — a percentage added to a net price — so this calculator handles them too. Just enter the relevant rate (for example 20% UK VAT or 10% Australian GST). The terminology and invoicing rules differ, though: see UK VAT invoices explained for those specifics.
Frequently asked questions
Do I charge tax on shipping?
It depends on the jurisdiction — some tax shipping when the goods are taxable, others don't. Check the rules for the buyer's location before assuming.
Is sales tax part of my revenue?
No. Tax you collect is held on behalf of the tax authority and paid over to them, so it isn't income and shouldn't appear in your profit margin math.
How do I show tax on an invoice?
List the net subtotal, then the tax as its own line with the rate shown, then the grand total. The free invoice generator lays it out this way automatically.
Ready to bill? Create a tax-itemised invoice with the invoice generator, or read sales tax on invoices for when and where you're required to charge it.