Question 1

What is the difference between Add Tax and Remove Tax mode?

Accepted Answer

Add Tax starts from a pre-tax (base) price and computes the tax amount plus the gross price your customer pays. Remove Tax does the inverse: you enter the gross price (already inclusive of VAT/GST/sales tax) and the calculator extracts the original base cost plus the tax component. Use Add Tax when quoting; use Remove Tax when reading off an inclusive invoice or receipt.

Question 2

Can I use this for invoices?

Accepted Answer

Yes. The math matches what accounting software uses for VAT, GST and sales tax line items. It supports US sales tax, UK VAT, Australian GST, Canadian GST/HST, and Indian GST at any rate you set. For a fully compliant invoice you'll still need the legal tax number, supplier details, and itemized lines, but the tax math itself is correct.

Question 3

How do I calculate price before tax (removing tax)?

Accepted Answer

To extract pre-tax cost, divide the final price by (1 + tax rate / 100). For example, a $120 item with 20% VAT has a base cost of $120 / 1.2 = $100, and $20 tax.

Question 4

What's the difference between sales tax, VAT, and GST/HST?

Accepted Answer

US sales tax is charged once, at the final retail sale, and the rate combines state, county, and city tax. VAT (UK, EU) and GST (Australia, India) are charged at each step of the supply chain, but businesses reclaim the tax they paid on inputs, so the end consumer effectively bears it once. Canada's HST is a 'harmonised' tax that bundles the federal GST with a provincial portion into a single rate. For a buyer reading a receipt the math is the same; the difference is how the tax is collected and remitted behind the scenes.

Question 5

Which rate applies, the seller's location or the buyer's?

Accepted Answer

It depends on the system. US sales tax is generally destination-based, so the rate usually follows where the buyer takes delivery, and a business only has to collect it where it has 'nexus' (a physical or economic presence). VAT and GST rules for cross-border and digital sales have their own place-of-supply tests. Because these rules are detailed and change often, this calculator works out the tax for whatever single rate you enter rather than deciding which jurisdiction's rate applies, check local rules or an accountant for that.

Sales Tax / VAT Calculator

How We Work It Out

Real-World Examples

Extracting 20% VAT in the UK

Adding tax to a quote

Frequently Asked Questions (FAQ)

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