How to Add Tax to a Price: A Simple Guide
TL;DR: To add tax to a price, multiply the original price by the tax rate (expressed as a decimal), and then add the result to the original price.
In countries like Canada, sales tax is a normal part of purchasing goods and services. This can come in the form of the Goods and Services Tax (GST), Provincial Sales Tax (PST), or the Harmonized Sales Tax (HST), depending on the province.
To calculate the total cost of a product or service including tax, you simply add the relevant sales tax to the original price. Here's a step-by-step guide on how to do this:
Identify the original price of the good or service.
Determine the relevant sales tax rate.
Convert the tax rate from a percentage to a decimal by dividing it by 100.
Multiply the original price by the tax rate (in decimal form) to calculate the amount of tax.
Add the amount of tax to the original price to get the total price.
For example, if you have a product that costs $100 and the sales tax rate is 5%, the total price would be calculated as follows:
Tax amount = $100 * (5/100) = $5
Total price = $100 + $5 = $105
It's important to note that tax rates can vary significantly from one province to another, and they can also change over time. Always ensure you are using the most current tax rate for your calculations.
If you have any questions about calculating taxes or need help with tax-related matters, feel free to contact us at Tax Heroes. Our team of tax professionals is here to guide you through the complex world of taxes and help you make the most of your financial situation.
