How To Calculate Sales Tax In Your Head

If you ever have a basket full of shopping goods and want to get a rough idea of the sales tax you’ll be paying, here’s a guide for how to quickly and accurately estimate your tax bill.

This depends on the state you are in – some states have rates as low as 0% (no sales tax), all the way up to nearly 10%. You can determine your state’s rate by checking a receipt on a recent purchase. The total sales tax will be displayed and usually falls between 5 and 9%.

(1) Round your purchase to the nearest ten. If your purchase total is $476.99, round it to $480.

(2) Know your state tax rate, and round it to the nearest whole number. This can be as low as 5%, or as high as 9%.

(3) Follow these tricks for estimating your tax and total:


(a) Divide your purchase total by 10, ie: delete the last zero in the total. So $480 becomes $48.

(b) Now divide by 2. So $48 becomes $24, your approximate sales tax.


Follow the steps for the 5% tax. Now, divide your original amount by 100 (shift the decimal place over by two), so $480 becomes $4.80, or about $5.

Now add this amount to the 5% sales tax: $24+$5=$29.


Same as 6%, but add the total divided by 100 two times. So $24+$5+$5=$34.

9%: Divide your total by 10, so $48. Now divide this by 10 again, and subtract: $4.8, or about $5, so $48-$5=$43.

8%: Follow the same steps as for the 9% sales tax, but subtract twice: $48-$5-$5=$38.

If you follow these steps, you’ll be able to quickly estimate the tax on any item you’re purchasing.

Here is another common mental math question: how can you quickly estimate, in your head, a fair tip for your waiter or waitress?

Most advice says we should give 15-20% tip. Here’s how to quickly estimate the top you give to a server.

Let’s say your restaurant bill is $53.

(1) Divide this by 10: $5.30

(2) Multiply this by 2: $10.60, or about $11.00.

(3) The halfway point between these 2 is the 15% tip, so in this case, about $8.00.

(4) The amount in (2) is a more generous 20% tip.

Pick an amount between (2) and (3) if your service was extra good.

Source by Scott A McKinney

Diana McCalpin is an accountant who manages a Certified Public Accounting Practice in Laurel, Maryland which performs audit, accounting and tax services to customers. She loves to share information with clients to help them grow their businesses and be profitable.

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