Adding tax and extracting tax
The calculator has two modes. In Add tax to price, you enter the price before tax and a rate. In Extract tax from total, you enter a receipt total that already includes tax, and it works backwards. The formulas are different, which is where most mistakes come from:
- Add:
tax = price × rate / 100, thentotal = price + tax. - Extract:
price = total ÷ (1 + rate / 100), thentax = total − price.
The six buttons (CA 7.25%, TX 6.25%, NY 4%, FL 6%, WA 6.5% and CO 2.9%) just fill in the rate field. They are base statewide rates only, and the tool says so below the results.
Worked examples
Add 7.25% to a 100.00 item: tax is 7.25 and the total is 107.25. Extract from a 107.25 receipt at the same rate: 107.25 ÷ 1.0725 = 100.00, so tax is 7.25. The wrong shortcut of taking 7.25% off the 107.25 total gives 7.78 of tax and a price of 99.47, which is off because the tax was charged on the pre-tax price, not on the total.
| Rate | Add to 100.00 | Extract from 100.00 |
|---|---|---|
| 4% | Tax 4.00, total 104.00 | Price 96.15, tax 3.85 |
| 6.25% | Tax 6.25, total 106.25 | Price 94.12, tax 5.88 |
| 7.25% | Tax 7.25, total 107.25 | Price 93.24, tax 6.76 |
| 10% | Tax 10.00, total 110.00 | Price 90.91, tax 9.09 |
Why the rate you type may not match your receipt
- Local add-ons. In many US states, cities, counties and special districts levy their own tax on top of the state rate, so the combined rate at a given address is often higher than the state figure. The base rates in the buttons can also change when legislatures revise them, so verify against your state revenue department or the receipt itself.
- What is taxable. Groceries, prescription medicine, clothing and services are exempt or taxed differently in various jurisdictions. The calculator applies one rate to the whole amount.
- Rounding. Stores may round tax per item or per receipt, so the last cent can differ from this tool, which rounds only on display.
- Outside the US. Countries with VAT or GST include tax in the shown price and set different rates by product type. You can still type any rate into the field, but for Indian GST slabs the GST calculator is set up with the rate choices.
When a discount applies first, work out the sale price in the discount calculator and use that as the price before tax. To bill a client with tax, the invoice generator applies one tax rate to the invoice subtotal.