How to Add or Remove 18% GST
· 4 min read
The right way to add 18% sales tax to a price and to take it out of a tax-inclusive total — and the common mistake that gives the wrong answer.
Adding GST
Multiply the price by 1.18. A Rs 10,000 item becomes Rs 11,800, of which Rs 1,800 is tax.
Removing GST from a total
Divide the total by 1.18. Rs 11,800 ÷ 1.18 = Rs 10,000 before tax, so the tax is Rs 1,800.
The common mistake is to take 18% off the total: Rs 11,800 × 0.82 = Rs 9,676, which is Rs 324 too low. The tax was charged on the pre-tax price, not on the total, so you must divide.
The quick formulas
- Tax-exclusive → inclusive: price × (1 + rate)
- Tax-inclusive → exclusive: total ÷ (1 + rate)
- Tax inside a total: total × rate ÷ (1 + rate) — for 18%, that's total × 0.1525
Goods vs services in Pakistan
Federal sales tax on goods is collected by FBR at a standard 18%, with reduced rates and exemptions for some items. Sales tax on services is collected by the provinces — Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan each set their own rates, which can differ from 18%.
Always check which rate is printed on the invoice and use that rate in the calculator.