GST & Sales Tax Calculation
Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption. Whether you are a business owner calculating invoices or a shopper checking the tax on a bill, this tool helps you instantly find the tax amount.
Inclusive vs. Exclusive
- Exclusive: The tax is added on top of the price (e.g., $100 + 10% Tax = $110). This is common at checkout in the US.
- Inclusive: The tax is already inside the final price (e.g., If you pay $110 and tax is 10%, the item cost $100 and tax was $10). This is standard in the EU, India, and Australia.
The Formulas
Net = Gross / (1 + Tax Rate)
Tax Amount = Gross − Net
The most common and costly mistake is trying to extract tax from an inclusive price by multiplying the gross by the tax percentage — for example, calculating $118 × 0.82 to "remove" 18% tax. That's mathematically wrong. The correct method is to divide: 118 / 1.18 = $100 net.
A Worked Example
A product costs $100 before an 18% GST. Adding tax: 100 × 1.18 = $118 total, of which $18 is GST. Now reverse it — if a receipt shows $118 including 18% GST, the pre-tax amount is 118 / 1.18 = $100, and the tax portion is $18.