How to calculate sales tax in your head
If you ever have a basket full of shopping items and you want to get a rough idea of the sales tax you will pay, here is a guide on how to quickly and accurately calculate your tax bill.
This depends on the state you are in – some states have rates as low as 0% (excluding sales tax), up to almost 10%. You can determine the rate for your state by verifying a receipt for a recent purchase. The total sales tax will be displayed and is typically 5-9%.
(1) Round your purchase to the nearest ten. If your total purchase is $ 476.99, round it to $ 480.
(2) Know your state’s tax rate and round to the nearest whole number. This can be as low as 5% or as high as 9%.
(3) Follow these tricks to estimate your tax and the total:
5%:
(a) Divide the total of your purchase by 10, that is, remove the last zero from the total. So $ 480 becomes $ 48.
(b) Now divide by 2. So $ 48 becomes $ 24, your approximate sales tax.
6%:
Follow the steps for the 5% tax. Now divide your original amount by 100 (change the decimal place by two), so that $ 480 becomes $ 4.80, or about $ 5.
Now add this amount to the 5% sales tax: $ 24 + $ 5 = $ 29.
7%:
Same as 6%, but add the total divided by 100 twice. 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.
By following these steps, you can quickly estimate the tax on any item you are purchasing.
Here’s another common mental math question: How can you quickly estimate, in your head, a fair tip for your waiter or waitress?
Most tips say we should tip 15-20%. Here’s how to quickly calculate the top you give 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 midpoint between these 2 is the 15% tip, so in this case, around $ 8.00.
(4) The amount in (2) is a 20% more generous tip.
Choose an amount between (2) and (3) if your service was very good.