---
title: "How do I add sales tax to a price? | LocoTap"
description: "On top, it’s the price times your rate; inside, work back. A 500 price at a 10% rate, tax on top: 50 tax, 550 in all."
url: "https://locotap.com/learn/sales-tax"
---

# How do I add sales tax to a price?

On top, it’s the price times your rate; inside, work back.

**For**

Put the right tax on a bill, whether it goes on top or is already inside.

**When**

Every time you price or bill a job

## Try it

A 500 price at a 10% rate, tax on top: 50 tax, 550 in all.

On top, tax = price × rate; inside, tax = price × rate ÷ (100 + rate).

Know if your price has tax in it, and say so.

## Worked out

| Rate | Tax on top | Total | Tax inside |
| --- | --- | --- | --- |
| 5% | 5.00 | 105.00 | 4.76 |
| 10% | 10.00 | 110.00 | 9.09 |
| 15% | 15.00 | 115.00 | 13.04 |
| 20% | 20.00 | 120.00 | 16.67 |

## Easy to get wrong

- Taking the rate off a price with tax in.
- Charging tax before you’re signed up.
- Prices with and without tax mixed up.
- No tax line on the invoice.

## The tool for it

**Sales tax** Receipts with the sales tax worked out [Start free](https://locotap.com/sign-in?back=%2Fapp%2Flearn%2Fsales-tax)

## Questions

**What rate do I use?**

The one where the work is done; type in your own. Check the rule where you work.

**Do I charge tax on labour?**

Some places tax labour, some only parts. Check the rule where you work.

**Should my prices include tax?**

Either, if the bill shows it. Say which on every quote.

**Why can’t I take 10% off the total?**

Because the tax was worked out on the price before tax, which is smaller.

**Do I round the tax?**

To the cent, on the bill’s total, not on each line.

**What if I charged the wrong rate?**

Send a corrected invoice and keep both. Check the rule where you work.

**Do I keep the tax I collect?**

No, it’s owed, so set it aside the day it comes in.

**Does a deposit carry tax?**

It can; it depends on when tax is due. Check the rule where you work.

Next · Get paid: [When do I have to register for sales tax?](https://locotap.com/learn/tax-register)