Calculating Tax, Tips, and Commission

Sales Tax – calculated by finding a certain percent of the purchase price; the percentage answer is then added back to the original price to find the total cost

Tip – money given to someone to show appreciation for a service provided (waiter, hair stylist, valet, etc.)

Commission – money paid to an employee in addition

to their salary; usually based on a percent they sell (car salesman, real estate agent, etc.)

Calculating Sales Tax:A cd costs $10.00. In the parish you live in the sales tax is 4%. What will be the total cost you pay with sales tax?Step

One:Change the percent to a decimal4% = .04

Step Two: Multiply the price and the decimal

.04 • $10.00 = 0.40 (tax)

Step Three:

Add the tax back to original price

0.40 + 10.00 = $10.40

Calculating Sales Tax:A sweater costs $26.75. The store will add 7.5% sales tax to your purchase. What will be the total cost you pay with sales tax?Step

One:Change the percent to a decimal7.5% = .075Step Two: Multiply the price and the decimal

.075 • $26.75 = $2.01 (tax)

Step Three:

Add the tax back to original price

2.01 + 26.75 = $28.76

Calculating Tips:Last night our dinner costs $23.56. Ifwe left our waiter an 18% tip, whatwas our total bill?

Step One:

Change the percent to a decimal18% = .18

Step Two: Multiply the price and the decimal

.18 • $23.56 = $4.24 (tip)

Step Three:

Add the tip back to original price

4.24 + 23.56 = $27.80

Calculating Tips:Our cab ride costs us $18.25. If wegive the driver a 15% tip, what wasour total bill?

Step One:

Change the percent to a decimal15% = .15

Step Two: Multiply the price and the decimal

.15 • $18.25 = $2.74 (tip)

Step Three:

Add the tip back to original price

2.74 + 18.25 = $20.99

Calculating Tips:You treat a friend to lunch. The total cost of the food is $9.68. A 7% sales tax will be added and you want to give a 20% tip for excellent service. How much will you pay for lunch?

Step One:

Find the sales tax

7% = .07

Step Two: Find the tip

.20 • $9.68 = $1.94 (tip)

.07 • 9.68 = 0.68 (tax)

20% = .20

Calculating Tips:

Step Three: Add the tax and tip to the bill to find the total

.68 (tax) + 1.94 (tip) + 9.68 (cost) = $12.30

Calculating Commission:A salesperson receives a salary of

$650 each week, plus a commission of 4% of all sales. In one week, his sales are $1,250. What does the salesperson earn that week?

Total Earnings = salary + commissionStep One:

Find the commission

.04 • $1250 = $50.00 (commission)

Calculating Commission:A salesperson receives a salary of

$650 each week, plus a commission of 4% of all sales. In one week, his sales are $1,250. What does the salesperson earn that week?

Total Earnings = salary + commissionStep Two: Add the commission to salary

$50 + $650 = $700.00 (total earnings)