How to Calculate Tax on A Purchase in Ontario

Calculating tax on a purchase in Ontario involves understanding the province's tax rates and applying them correctly to your purchase price. This guide provides a step-by-step explanation, a calculator tool, and examples to help you determine the total cost of your purchase including taxes.

How Ontario Tax Calculation Works

In Ontario, the Harmonized Sales Tax (HST) is the primary tax applied to most purchases. The HST combines the federal Goods and Services Tax (GST) and the provincial Sales Tax (PST) into a single rate. The current HST rate in Ontario is 13%.

When you make a purchase, the seller typically adds the HST to the price before you pay. However, if you're calculating the tax yourself, you can determine the tax amount by multiplying the purchase price by the tax rate.

Tax Amount = Purchase Price × Tax Rate Total Cost = Purchase Price + Tax Amount

For example, if you buy an item priced at $100, the tax would be $13 (100 × 0.13), making the total cost $113.

Step-by-Step Guide to Calculating Tax

Determine the purchase price of the item you want to buy.
Identify the applicable tax rate. In Ontario, this is typically 13% for most goods and services.
Multiply the purchase price by the tax rate to calculate the tax amount.
Add the tax amount to the purchase price to find the total cost.

Using our calculator below, you can quickly perform these calculations for any purchase price.

Common Ontario Tax Rates

The following table shows the standard tax rates applicable in Ontario:

Tax Type	Rate	Applies To
Harmonized Sales Tax (HST)	13%	Most goods and services
Provincial Sales Tax (PST)	8%	Certain goods and services
Goods and Services Tax (GST)	5%	Federal tax component

Note: Some items may be exempt from tax or may have different tax rates. Always check the specific tax requirements for the item you're purchasing.

Example Calculations

Let's look at a few examples to illustrate how tax calculation works in Ontario:

Example 1: Clothing Purchase

You want to buy a jacket priced at $75. The HST rate is 13%.

Tax Amount = $75 × 0.13 = $9.75 Total Cost = $75 + $9.75 = $84.75

The total cost including tax is $84.75.

Example 2: Electronics Purchase

You're buying a laptop priced at $1,200. The HST rate is 13%.

Tax Amount = $1,200 × 0.13 = $156 Total Cost = $1,200 + $156 = $1,356

The total cost including tax is $1,356.

Frequently Asked Questions

What is the current HST rate in Ontario?

The current Harmonized Sales Tax (HST) rate in Ontario is 13%. This combines the federal GST and provincial PST.

Do all purchases in Ontario include HST?

Most purchases in Ontario include the HST. However, some items may be exempt from tax, such as groceries, prescription drugs, and certain medical supplies.

How do I calculate the tax on a purchase?

To calculate the tax, multiply the purchase price by the tax rate (13% for most items). Then add this amount to the original price to get the total cost.

Are there any items that are tax-exempt in Ontario?

Yes, some items are tax-exempt, including groceries, prescription drugs, and certain medical supplies. Always check the specific tax requirements for the item you're purchasing.