Sales tax appears on electricity bills, restaurant receipts, online orders and business invoices. Whether you are a shopkeeper preparing an invoice or a customer checking a bill, you need to know how to add tax to a price and how to take it out of a total. This guide explains how to calculate sales tax (GST) in Pakistan, with examples you can check in our free VAT Calculator.
Pakistan’s sales tax in brief
The standard federal sales tax on goods is 18%. Services are taxed by provinces at their own rates, and some goods and services have reduced or special rates. Rates change in budgets, so check current rules for your product or service.
Adding sales tax
Price with tax = price × (1 + rate)
Rs 5,000 + 18% = 5,000 × 1.18 = Rs 5,900. The tax is Rs 900.
Removing sales tax from a total
Price before tax = total ÷ (1 + rate)
Rs 5,900 including 18% → 5,900 ÷ 1.18 = Rs 5,000. The tax is Rs 900.
The common mistake
Taking 18% of the total (18% of 5,900 = Rs 1,062) and subtracting it gives Rs 4,838, which is wrong. Tax was calculated on Rs 5,000, so you must divide. This mistake is common on receipts and in shop accounts.
Quick table at 18%
| Before tax | Tax | Total |
|---|---|---|
| Rs 1,000 | Rs 180 | Rs 1,180 |
| Rs 2,500 | Rs 450 | Rs 2,950 |
| Rs 10,000 | Rs 1,800 | Rs 11,800 |
| Rs 50,000 | Rs 9,000 | Rs 59,000 |
On invoices
A proper invoice shows the value before tax, the tax rate, the tax amount and the total. Registered businesses also show their NTN and STRN. Our Invoice Generator lays this out automatically.
Discounts and tax
Tax is usually charged on the price after discount. A Rs 10,000 item with 20% off becomes Rs 8,000, and tax at 18% makes Rs 9,440. The Discount Calculator includes a tax step.
Other countries
The UAE charges 5% VAT and Saudi Arabia 15%. For other rates, see VAT Calculator by Country, and read sales tax on invoices if you run a business.
Frequently asked questions
How do I add 18% sales tax?
Multiply the price by 1.18.
How do I remove 18% sales tax from a total?
Divide the total by 1.18.
What is the sales tax rate in Pakistan?
The standard federal rate on goods is 18%; services are taxed by provinces at different rates.