Sales Tax Calculator

How this is worked out

Adding tax is the easy direction. Multiply:

total = net × (1 + rate ÷ 100)

Taking it back out is where people go wrong. You must divide, not subtract:

net = total ÷ (1 + rate ÷ 100)

Here is why. A price of 119 including 19% tax came from a net price of 100, because 100 × 1.19 = 119. Divide 119 by 1.19 and you get 100 back. Correct.

Subtract 19% from 119 instead and you get 96.39. That is wrong, and it is wrong in a specific way: 19% of 119 is bigger than 19% of 100, because the tax was calculated on the smaller number in the first place.

The error looks small on one invoice and is not small across a year of them. It is one of the most common mistakes on self-prepared bookkeeping, and it always understates the net figure, which means it overstates the tax you think you owe.

A worked example

Adding tax. A net price of 100 at 19%:

• Tax: 19
• Customer pays: 119

Removing tax. A shelf price of 119 including 19%:

• Net: 100
• Tax: 19

And the wrong way, for comparison: 119 − 19% = 96.39. Out by 3.61 on a single 119 item. On 50,000 of turnover, the same error is over 1,500.

What this doesn't cover

• This handles one rate at a time. A basket mixing standard-rated and reduced-rated items needs each part calculated separately.
• Reverse charge, intra-EU supplies and exemptions are not covered.
• Rates change, and which rate applies to which goods varies by country. The figure filled in here is a default, not advice about your situation.
• This is arithmetic, not tax advice. For anything that goes on a return, check with your accountant or tax authority.

Common questions