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 17.5%...
|
|
Net
price
|
multiplied
by
|
1.175
|
=
Gross price
|
|
Price
before tax
|
multiplied
by
|
1.175
|
=
Price after tax
|
|
eg.
150.00
|
multiplied
by
|
1.175
|
=
176.25
|
|
In the equation
above, 1.175 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 17.5%,
we will need to divide 17.5 by 100, giving 0.175, then add 1.
Thus the multiplier is 0.175 +1 = 1.175
|
So
now let's assume that a tax is at a new rate of 2.5%...
First, get the multiplier :
2.5 / 100 = 0.025
0.025 + 1 = 1.025
The multiplier is 1.025
So...
|
|
Net
price
|
multiplied
by
|
1.025
|
=
Gross
price
|
|
Price
before tax
|
multiplied
by
|
1.025
|
=
Price after tax
|
|
eg
:
|
|
|
|
|
100
|
multiplied
by
|
1.025
|
=
102.50
|
|
100
+ Tax
|
|
|
=
102.50 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?
|
Unit
Conversion Tool - download