GST and sales tax calculator
Add sales tax to a price, or work backwards from a tax-inclusive total to find the price before tax. Working backwards is where most mistakes happen, because you cannot simply subtract the percentage.
Uses a standard published formula, explained below. Everything is calculated in your browser, and nothing you enter is sent to a server. This is not financial advice.
Amount and rate
Price including tax
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Base amount
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Tax
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Total including tax
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Show the working
The calculation with your figures substituted in:
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Adding tax and removing tax work differently
This is the most common mistake in tax calculations, and it costs businesses real money on their invoices.
Adding tax is straightforward. A price of 1,000 before tax becomes 1,180 with 18% tax: you simply multiply by 1.18.
Removing tax is where people go wrong. If a price of 1,180 already includes 18% tax, taking 18% off it gives 967.60, which is wrong. The 18% was calculated on the smaller, pre-tax price, not on the total, so you need to divide instead of subtract. The correct price before tax is 1,180 divided by 1.18, which is 1,000.
The error grows with the rate. At 5% it is small enough to look like rounding, but at 18% or more it becomes significant, and on a large invoice it is the kind of mistake that auditors notice.
The formulas
To add tax: Total = Price before tax × (1 + rate ÷ 100)
To remove tax: Price before tax = Total ÷ (1 + rate ÷ 100)
The tax amount is the difference between the two. The calculator shows both figures, so you can copy either one onto an invoice.
Sales tax in Pakistan
The standard federal sales tax on goods in Pakistan is 18%. Use the 18% Pakistan sales tax button to fill it in. Some goods have reduced or zero rates, and sales tax on services is set by each province at its own rate, so check the rate for your product or service before you issue an invoice.
Here is a worked example. A price of Rs 10,000 before tax becomes Rs 11,800 with 18% sales tax. Working the other way, a price of Rs 11,800 that includes tax contains Rs 1,800 of tax on a base price of Rs 10,000. You find the base price by dividing by 1.18, not by taking 18% off the total.
Tax-inclusive and tax-exclusive prices
Which direction you need depends on how prices are shown where you are. In much of Europe, Australia and India, shop prices include tax, so the price on the shelf is the price you pay. In the United States, prices are usually shown without sales tax, which is added at the till.
Between businesses, prices are almost always quoted without tax, because registered businesses can usually claim the tax back and care about the net figure. When you issue an invoice, always state clearly whether your price includes tax. Unclear pricing is a common cause of payment disputes.
Different rates for different goods
Most tax systems charge different rates for different kinds of goods and services, often with lower rates or exemptions for essentials. India has several GST slabs, and EU countries each set a standard VAT rate with reduced rates for certain items. The quick-pick buttons cover common rates, but they are shortcuts, not guidance. Choosing the wrong category matters far more than getting the arithmetic wrong, so check the rate for your exact goods or services with your tax authority.
Not tax advice. This calculator applies the rate you enter. It does not decide which rate applies to your sale, and it does not handle input tax credits, reverse charge, exemptions or cross-border rules. Speak to a qualified tax adviser about anything you file with a tax authority.
Frequently asked questions
How do I calculate 18% sales tax in Pakistan?
Multiply the price before tax by 1.18 to get the total including tax. For Rs 10,000, that is Rs 11,800, of which Rs 1,800 is sales tax.
How do I remove tax from a total price?
Divide the total by one plus the tax rate as a decimal. For 18%, divide by 1.18. Taking 18% off the total gives the wrong answer, because the tax was calculated on the smaller, pre-tax amount.
What is the difference between inclusive and exclusive prices?
An inclusive price already contains the tax, while an exclusive price has the tax added at checkout or on the invoice. Shop prices usually include tax in Europe, Australia and India, and exclude it in the United States.
Why does subtracting the percentage give the wrong answer?
Because a percentage is always taken from a particular base. Adding 18% and then subtracting 18% does not bring you back to the start, since the second calculation uses a larger number than the first.
Which tax rate should I use?
Use the rate that applies to your specific goods or services under your country's rules. Most systems have several rates by category, so check with your tax authority instead of assuming the standard rate.
Does this calculator handle input tax credits?
No. It works out the tax on a single sale. Input tax credits, reverse charge and reconciling a full tax period need proper accounting software or an accountant.
Can I use this for VAT or GST in other countries?
Yes. GST, VAT and sales tax all use the same arithmetic for a single sale. Only the rates and the rules about what they apply to differ.