Add tax to a price, or strip it out of a total.
The subtotal you charge before any sales tax.
Your combined state and local rate.
Removing tax is not the same as subtracting the percentage. To take 8.25% tax out of a total you divide by 1.0825, you do not subtract 8.25%. On a $108.25 total, dividing gives $100.00, while subtracting gives $99.32 and leaves you short.
Sales tax is money you collect for the state, not revenue, so keep it out of your margin maths. Work out what you actually keep with the profit margin calculator.
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Sales tax is a percentage added to the price of goods and services at the point of sale, collected by the seller and passed on to the state. It is a pass through charge rather than income, so the money never belongs to the business. In the United States it is set by states, counties and cities rather than nationally.
Multiply the price before tax by the tax rate written as a decimal, then add the result to the price. A $100 item at 8.25% gives $100 times 0.0825, which is $8.25 of tax, for a total of $108.25. The same works at any rate: change 0.0825 to your own combined rate.
Tax equals subtotal multiplied by rate divided by 100, and total equals subtotal plus tax. You can also get straight to the total in one step by multiplying the subtotal by 1 plus the rate as a decimal. For a $250 order at 6%, $250 times 1.06 gives $265.
Divide the tax inclusive total by 1 plus the rate as a decimal. At 8.25%, a $108.25 total divided by 1.0825 gives a subtotal of $100, so the tax portion is $8.25. Switch this calculator to remove tax and it does the division for you.
Because the percentage was applied to the smaller pre tax figure, not to the total. Taking 8.25% off a $108.25 total removes $8.93 and leaves $99.32, which is 68 cents short of the real $100 subtotal. The gap widens as the amount and the rate grow, so always divide rather than subtract.
Divide the total by the subtotal, subtract 1, then multiply by 100. A $54 total on a $50 subtotal gives 54 divided by 50, which is 1.08, so the rate is 8%. This is a quick way to reverse engineer the rate printed on a receipt.
Rates are set locally and change often, so this calculator takes whatever rate you supply rather than guessing one. State rates in the United States generally run from 0% to around 7.25%, and counties and cities stack their own rates on top. Five states charge no statewide sales tax at all, though local rates can still apply in some of them.
Counties, cities and special districts can add their own tax on top of the state rate, so two stores an hour apart can charge different amounts. The figure you actually charge is the combined rate for the location where the sale is taxed. Look up the combined rate for that address rather than assuming the state rate.
It depends on the state. Some treat delivery charges as part of the taxable sale, some exempt them when they are stated separately on the invoice, and some only tax shipping when the goods themselves are taxable. If shipping is taxable where you sell, add it to the subtotal before running the calculation.
Sales tax is charged once, at the final sale to the consumer, and is usually shown on top of the ticket price. VAT is collected at every stage of the supply chain, with businesses reclaiming what they paid, and in most countries it is already baked into the displayed price. The remove tax mode here is the one most VAT users want, since it pulls the tax back out of a gross figure.
Nexus is the connection that obliges you to register for and collect sales tax in a state, created by physical presence such as staff or stock, or by economic activity above a sales or transaction threshold. Once you have nexus somewhere, you charge that location's rate on taxable sales there.
In the United States most retailers show prices before tax and add it at checkout, so shoppers expect the total to rise at the final step. Markets used to VAT expect the opposite, with tax already included in the shelf price. If you display tax inclusive prices, use remove tax mode to see the revenue you actually keep.
Subtracting the percentage instead of dividing when reversing tax out, using the state rate when a combined local rate applies, and counting collected tax as revenue in your margin calculations. Rounding at the wrong stage causes trouble too: work the tax out on the full order, not line by line, unless your platform requires otherwise.
Yes. No signup, no email and no cap on how many calculations you run. It is built by Mage Loyalty, a loyalty, referrals and store credit app for Shopify.
Mage is a loyalty, referral and store credit app built for Shopify. Reward repeat purchases, run VIP tiers, and give customers a reason to come back, without writing a line of code.
