Calculators & everyday math
How to Calculate Sales Tax on a Purchase
Adding sales tax is a percentage calculation with one practical wrinkle: the result has to land on a whole cent. This guide shows the two-step and one-step methods, how decimal rates work, and how rounding is usually handled.
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Two steps: find the tax, then add it
- Multiply the price by the rate and divide by 100: at 7%, the tax on $80 is $80 × 7 ÷ 100 = $5.60.
- Add the tax to the price: $80 + $5.60 = $85.60.
One step: multiply by 1 plus the rate
Adding 7% tax is the same as multiplying by 1.07, so $80 × 1.07 = $85.60 in a single step. For 8.25%, multiply by 1.0825; for 6.625%, by 1.06625.
Decimal rates and rounding
Rates with several decimal places are common where state and local taxes are combined. At 6.625%, the tax on $100 is $6.625 — half a cent more than $6.62. Rounded to the nearest cent it becomes $6.63, making $106.63.
Stores and tax rules differ on the details: some round the tax on each item, others on the whole receipt, so a register total can be a cent different from a calculation on the total.
Worked examples
| Price | Rate | Tax | Total |
|---|---|---|---|
| $80.00 | 7% | $5.60 | $85.60 |
| $49.95 | 8.25% | $4.12 | $54.07 |
| $100.00 | 6.625% | $6.63 | $106.63 |
| $1,299.00 | 10.25% | $133.15 | $1,432.15 |
| $12.50 | 0% | $0.00 | $12.50 |
Calculate Sales Tax FAQ
- What is the formula for sales tax?
- Tax = price × rate ÷ 100, and total = price + tax. At 7%, $80 comes to $85.60.
- How do I add 8% sales tax to a price?
- Multiply the price by 1.08. $45 plus 8% tax is $45 × 1.08 = $48.60.
- Why is the tax sometimes a cent different from my receipt?
- Rounding. A register may round the tax on each item separately, while a calculation on the whole price rounds only once.
- Is sales tax charged before or after a discount?
- It depends on where you are and the kind of discount — rules for store discounts, coupons, and rebates vary. The arithmetic is the same either way: apply the rate to whichever amount is taxable.
- Does the same method work for other percentage taxes?
- Yes. Any tax added on top of a price as a percentage is calculated the same way.
Related guides
- Rate vs. AmountThe difference between a sales tax rate and the tax you pay, how combined state and local rates add up, and how to estimate a rate from a receipt.
- Price Before TaxWork backward from a total that includes tax to the original price and the tax, why subtracting the rate is wrong, and how rounding affects it.
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