Sales tax
Formula: Price with tax = price × 1.16 · Price before tax = inclusive price ÷ 1.16 · Line tax = (quantity × unit price - discount) × the item's rate
How to use it
Add tax to a pre-tax price, extract the tax from a price that already includes it, or build an invoice with several items, each at its own rate.
Type the amount in dinars, like 10 or 11.600. For an invoice, enter each item's quantity, unit price, discount and tax rate.
The rate starts at 16% and you can change it for items taxed at a different rate. Tax and totals update instantly.
Jordan's general sales tax rate is 16%, and many people simply call it VAT. If an item costs 10.000 JOD before tax, the tax is 1.600 JOD and the customer pays 11.600 JOD. In other words, the price with tax is the pre-tax price multiplied by 1.16. Some goods and services carry a reduced rate or are exempt, which is why the calculator lets you change the rate. Confirm the right rate for your products with the Income and Sales Tax Department or your accountant.
The common mistake happens when you take tax out of an inclusive price. Multiply 11.600 by 16% and you get 1.856, which is wrong, because it charges tax on the tax. The right way is to divide 11.600 by 1.16, which gives the pre-tax price of 10.000, then subtract it from the inclusive price: the tax is 1.600 JOD. This matters when your shelf prices include tax and you want to know how much of each sale is actually yours.
In the multi-item invoice mode the calculator works line by line, the way a JoFotara invoice is built: quantity × unit price, minus the line discount, then tax on what is left at that item's rate, whether 16%, a reduced rate, zero or exempt. Example: two units at 6.250 JOD with a 0.250 JOD discount on the line give a net of 12.250 JOD and tax of 1.960 JOD. If an item carries special tax, its amount is added first and the general tax is worked out on the total after it. At the bottom you see the tax for each rate separately, which helps when you go through your return with your accountant.
Ghalleh works out the tax on every invoice line at that item's rate and sends the invoice to JoFotara, so this calculator is for pricing questions and double-checking the numbers.
Common questions
What is the sales tax rate in Jordan?
The general rate is 16%, and that is where the calculator starts. Some goods and services are taxed at reduced rates or exempt, so check each item's rate with the Income and Sales Tax Department or your accountant, then change the rate in the calculator.
How do I extract tax from a tax-inclusive price?
Divide the inclusive price by 1.16 to get the pre-tax price. The difference is the tax. For example, 23.200 ÷ 1.16 = 20.000, so the tax is 3.200 JOD.
Why can't I just take 16% of the inclusive price?
Because the rate applies to the pre-tax price, not the inclusive one. 16% of 11.600 is 1.856, but the real tax is 1.600 JOD. The gap is small on one receipt and adds up over a month.
How is tax worked out on an invoice with items at different rates?
Line by line: quantity × unit price, minus the discount, then tax at that item's rate. The line taxes are then added up per rate. Don't apply one rate to the invoice total, because the answer changes as soon as the items' rates differ.
Does the discount come off before or after tax?
Before. The discount comes off the line value and tax is worked out on what is left. Taxing first and discounting after would charge the customer tax on money they never paid.
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