How to Calculate Sales Tax: Formula, Examples & State Rates

Whether you are pricing a product, checking a receipt, or filling out an expense report, knowing how to calculate sales tax saves time and avoids mistakes. The math is simple, and a free sales tax calculator can do it for you in seconds.

The sales tax formula

Sales tax is the price multiplied by the tax rate, written as a decimal.

• Sales tax = price × rate. At 8.25%, use 0.0825.
• Total = price + sales tax, or price × (1 + rate).

Example: a $49.99 item at 8.25% has tax of $49.99 × 0.0825 = $4.12, so the total is $54.11.

What is $5 plus tax?

Multiply $5 by 1 plus your rate. At 7% sales tax, $5 plus tax is $5.35. At 8.25%, it is $5.41. Use the same method for any amount: price × (1 + rate).

How to calculate sales tax from the total

If a receipt shows only the final total, work backward by dividing by 1 plus the rate.

1. Convert the rate to a decimal and add 1. At 8%, that is 1.08.
2. Divide the total by that number. A $54 total ÷ 1.08 = $50.00 before tax.
3. Subtract to find the tax. $54 − $50 = $4.00.

In the calculator, tick Price already includes tax and it does this for you. This is handy for bookkeeping and expense reports.

How to calculate state and local sales tax

Sales tax in the United States is set by states, counties, and cities, so your rate depends on where you buy. To get your combined rate, add the state and local percentages. A 6% state rate plus a 2.5% local rate is 8.5%, and you apply that to the price.

Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Some Alaska towns still add local tax. The state sales tax calculator includes average combined rates for all 50 states and D.C., or you can enter your own rate.

Estimate sales tax with the free calculator

1. Open the sales tax rate calculator.
2. Enter the price, quantity, and any discount.
3. Pick your state or type a custom rate.
4. Read the tax, the total, and the price per item.

State presets are averages, so confirm the exact rate for your city on your receipt or your state revenue department site.

How much sales tax should a seller charge?

It depends on your state and where the customer is. Many states tax based on the buyer’s location, and others on the seller’s. If you sell online or in person, check your state’s rules and registration requirements. The calculator is for estimates, not tax advice.

Related tools

Add tax to a quote and send it with the invoice generator, or estimate the tax on a vehicle purchase with the auto loan calculator. See your take-home pay with the paycheck calculator. More money tools are on the calculators page.