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?
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