How
to add tax to a price
This is the
calculation you need to use when:
you know a price before tax (the
Net price)
but want to find out the price after
tax (the Gross price).
(click
here to see a similar calculation for deducting
tax)
If
we assume that tax is at a rate of 15%...

Net
price

multiplied
by

1.15

=
Gross price

Price
before tax

multiplied
by

1.15

=
Price after tax

eg.
150.00

multiplied
by

1.15

=
172.50


In the equation
above, 1.15 is the multiplier.
To get the multiplier, we need to convert the tax rate into a
fraction by dividing it by 100 and then add the resulting fraction
to 1.
So, if we assume that VAT is at a rate of 15%,
we will need to divide 15 by 100, giving 0.15, then add 1.
Thus the multiplier is 0.15 +1 = 1.15
So
now let's assume that a tax is at a new rate of 20%...
First, get the multiplier :
20 / 100 = 0.20
0.20 + 1 = 1.20
The multiplier is 1.20
So...

Net
price

multiplied
by

1.20

=
Gross
price

Price
before tax

multiplied
by

1.20

=
Price after tax

eg
:




100

multiplied
by

1.20

=
120.00

100
+ Tax



=
120.00 inc Tax


Click
here to see how to deduct a % from a price.
For
more information on taxes and Value Added Tax (
vat )
How
much do you markup a price to allow for a % discount?
