Redline
Free calculator

Tax on top, or tax already inside?

Put in an amount and your rate. You get the tax and total if you're adding it, and the pre-tax price and the tax inside it if the customer was quoted a tax-included number.

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%
Example only. Enter the rate that applies to your sale.
Tax added on top$62.50
Total with tax$1,062.50
If the amount already includes tax: price before tax$941.18
If the amount already includes tax: tax inside it$58.82

In Redline you set one sales tax rate for your workspace and it applies to the whole invoice. Check what's taxable where you work; this isn't tax advice.

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Not tax advice. Check your state's rules.

Whether labor, materials or both are taxable depends on your state, sometimes your city or county, and the kind of job (repair, new construction, a service, a sale of goods). This calculator has no rate lookup and doesn't decide what's taxable. Ask your state's revenue department or your accountant.

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How the math works

Adding tax: the amount times the rate is the tax, and the amount plus the tax is the total. At 6.25%, every $1,000 picks up $62.50.

Backing tax out: divide the tax-included amount by 1 plus the rate to get the price before tax. The difference is the tax inside it. A common mistake is to take 6.25% of the total and subtract it, which removes too much, because the tax was calculated on the smaller pre-tax number.

Rounding is to the cent on each result. If your state rounds per line instead of on the total, a long invoice can come out a cent or two different.

Worked example

Three amounts at an example rate of 6.25%:

AmountTax on topTotal with taxIf tax was included: pre-taxTax inside
$250.00$15.63$265.63$235.29$14.71
$1,000.00$62.50$1,062.50$941.18$58.82
$4,800.00$300.00$5,100.00$4,517.65$282.35

6.25% is only an example. Use the rate that applies to your sale.

What to watch for

  • Tell the customer whether a quote includes tax. A price quoted with tax and an invoice that adds it on top makes an argument.
  • If only the materials on a job are taxable where you work, calculate tax on the materials subtotal, not the whole invoice.
  • Rates can differ by city or county inside one state. Use the rate for where the work happens if that's the rule you're under.
  • Tax you collect isn't your money. Keep it out of your revenue numbers when you work out profit or break-even.

Questions contractors ask

Do contractors charge sales tax on labor?

It depends on the state and the kind of work, and the rules can differ between repair work and new construction. That's a question for your state's revenue department or your accountant. This calculator doesn't answer it.

How do I find the tax in a total that already includes it?

Divide the total by 1 plus the rate (1.0625 for 6.25%). That's the pre-tax price. Subtract it from the total for the tax. The calculator shows both on the last two lines.

How does Redline handle sales tax?

You set one sales tax rate for your workspace, and it applies to the whole invoice. That's on Solo ($29 a month) and up, with invoicing and card pay links. Quotes built in the quote composer, opened from Money (Solo and up), carry their own tax percentage; quotes the chat drafts don't add tax. Redline doesn't tax line by line, can't apply different rates for different locations, and doesn't file or remit tax for you. Reports can export a CSV for whoever does your books.

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