How the result is calculated
A sales tax, a VAT and a GST are all a percentage of the price before tax. What differs between countries is how many of them are stacked on one purchase and whether the shelf price already includes them. A purchase in Britain carries one tax, VAT. One in British Columbia carries two, the federal GST and the provincial PST, each charged on the price before tax. One in Los Angeles carries the state's statewide rate and the county and district rates on top. India charges one rate of GST but reports it as two halves, central and state, when buyer and seller are in the same state.
So the calculator works with a list of taxes for each place, each with its rate for the band of goods you choose. Adding tax charges each one on the net price and rounds it to the cent; taking tax out works backwards from the total, in the way HMRC describes for VAT: each tax is its share of the gross price, and the net price is whatever is left, so the two always add back to the figure on your receipt.
Adding tax: tax = Σ round(net × rate), gross = net + tax
Taking it out: tax = Σ round(gross × rate ÷ (1 + combined)), net = gross − tax
- net
- the price before tax
- rate
- each tax's rate for the band of goods, as a fraction: 0.2 for 20%
- combined
- the sum of the rates, here 5% + 9.975% = 14.975% for Quebec
- gross
- the price including every tax
The common mistake is to take 20% of a VAT-inclusive price. On £120 that gives £24, but the VAT on a £120 price is £20, because the 20% was charged on £100. The fraction to use is the rate divided by one hundred plus the rate: one-sixth at 20%, one twenty-first at 5%, one-eleventh for Australian GST and three twenty-thirds for New Zealand's.
Worked example
| Item | Amount | How it is obtained |
|---|---|---|
| California statewide rate | $7.25 | 7.25% of $100.00, including the 1.25% local share every county charges |
| Local sales tax, average | $1.78 | 1.78%, the Tax Foundation's population-weighted average of district rates |
| Price with tax | $109.03 | 9.03% in all; your receipt shows your district's own rate |
| Item | Amount | How it is obtained |
|---|---|---|
| VAT fraction at 20% | 1/6 | 20 ÷ (100 + 20) |
| VAT | £20.00 | £120.00 × 1/6 |
| Price before VAT | £100.00 | £120.00 − £20.00 |
| Item | Amount | How it is obtained |
|---|---|---|
| GST | $5.00 | 5% of $100.00 |
| QST | $9.98 | 9.975% of $100.00 is $9.975, a half cent rounded up |
| Price with tax | $114.98 | 14.975% in all |
| Item | Amount | How it is obtained |
|---|---|---|
| CGST | ₹90.00 | half of 18%, 9% of ₹1,000 |
| SGST | ₹90.00 | the other 9%, to the state |
| Price with GST | ₹1,180.00 | sold to another state it would be ₹180 of IGST instead |
Reading the result
The headline is the tax itself: what is added when you start from a price before tax, or what is inside the total when you start from a receipt. Under it are the price before tax, the combined rate and the price with tax, and the share of the gross price the tax makes up, which is the figure to multiply a receipt by. Each tax in the bill opens on its own working, so on a Canadian purchase you can see that GST and PST were each charged on the same base rather than one on the other.
The table beside the chart puts the same price at every band the place charges. That is the quickest way to see what a reduced rate is worth: in Ireland the same 100 euros is 23 euros of VAT at the standard rate, 9 at the second reduced rate that has covered restaurant meals since July 2026, and nothing at the zero rate that covers most food.
What changes the result
Where you buy
In the United States the state rate is set by law, but the county, city and district rates on top of it change from one street to the next, so the calculator starts from the Tax Foundation's average for the state and lets you type the rate on your receipt. Five states charge no state sales tax at all, and a group of them charge no local one either. In Canada the province decides whether you pay one harmonized tax or GST plus a provincial one. In Spain the Canary Islands replace IVA with IGIC, whose general rate is 7%.
What you buy
Most countries tax food, books, children's clothes or energy at less than the standard rate, and the bands differ more than the headline rates do. Britain and Ireland charge nothing on most food, Germany charges 7% and so does restaurant food since January 2026, Sweden cut food to 6% from April 2026, and New Zealand taxes groceries at the full 15%. Most American states exempt groceries, but some tax them at a reduced rate and a few at the full rate, often with local taxes still on top.
Rounding
Each tax is rounded to the cent on its own, half a cent up. Japan is the exception the calculator follows: the NTA lets a business drop the fraction of a yen, round it up or round to the nearest, once for each rate on an invoice, and dropping it is the usual choice. On the NTA's own example invoice, 8% of 27,060 yen is 2,164.8 yen and the tax shown is 2,164.
What is not included
The calculator does not know your exact address, so an American result uses the state's average local rate unless you enter your own. It covers the bands each country publishes for ordinary consumer goods, not the exemptions for particular buyers such as charities, resellers or exporters, or the excise duties on fuel, alcohol and tobacco. India's compensation cess on tobacco and the old rates still applied to those goods are left out, as are Ceuta and Melilla, Corsica and France's overseas departments, which have rates of their own. Sri Lanka's Social Security Contribution Levy is charged on the seller's turnover rather than added to the bill, so it is described rather than calculated.
Using the result
When you are pricing something to sell, start from your net price, add the tax and check the price with tax against what your customers expect to see; in a VAT country shop prices have to include it. When you are checking a receipt or claiming VAT back on a business purchase, start from the total and take the tax out, which gives the figure an invoice should show. For an American purchase, look up the combined rate for the delivery address and enter its local part, because that, more than the state rate, is where two receipts in one state differ.