Calculate sales tax, VAT, or income tax with a clear breakdown.
Tax is a mandatory financial charge collected by governments from individuals and businesses. It is used to fund public services such as healthcare, education, infrastructure, and national defense. Understanding how taxes work can help you manage your finances more effectively and avoid surprises at tax time.
Sales tax is applied at the point of sale and is typically added on top of the listed price. It is common in the United States. VAT (Value Added Tax) is collected at each stage of production and is included in the final price in most countries. Both are consumption taxes but they work differently in practice.
Gross income is your total earnings before any deductions or taxes. Net income is what you take home after taxes and deductions have been applied.
Tax deductions reduce your taxable income, which in turn reduces how much tax you owe. Common deductions include mortgage interest, charitable donations, and business expenses.
To add VAT: multiply the price by (1 + VAT rate). To remove VAT from a VAT-inclusive price: divide the price by (1 + VAT rate). For example, to remove 20% VAT from $120: $120 ÷ 1.20 = $100.