FinanceGuide4 parts · 1 min
How sales tax is added to a price
Multiply the price by the tax rate you were given, then add that amount back to the price.
The answer
Turn the rate into a decimal, multiply by the price, and add the result to the price. An 8.25% tax on $40 is $3.30, so the total is $43.30.
Apply the rate once
Divide the percent by 100 before you multiply. 8.25% is 0.0825. Times $40 is $3.30. The total is $43.30. If the price you have already includes tax, do not run this again. You would tax the tax.
A state rate and a city rate are two percents of the same price only when both apply to that item. Add the dollars, or add the rates and then multiply once. Adding the rates after one of them was already applied to a different base is a different bill.
Examples
$40 at 8.25%
0.0825 × 40 = 3.30. The total is 43.30.
Common mistakes
- Looking up a rate this page does not store and treating the guess as official.
- Running the percent on a price that already includes tax.
Questions
Does this know my city’s rate?
No. Type the rate from the receipt or the tax agency. The calculator only multiplies.