Final answer:
To calculate sales tax payable, multiply the item's price by the sales tax rate, then add this tax amount to the original price. When considering additional tips, the tip is calculated after adding the sales tax.
Step-by-step explanation:
Calculating sales tax payable involves two main steps. The first step is to determine the amount of sales tax by multiplying the price of the item by the rate of sales tax, which should be converted from a percentage to a decimal format. For instance, if the sales tax rate is 8.25%, you would convert it to 0.0825. If an item costs $10.00, the sales tax payable is 10 x 0.0825, which equals $0.83.
The second step is to add this calculated tax amount to the original price to obtain the total amount paid. Continuing with the example above, the total amount including sales tax would be $10.00 + $0.83, resulting in a final total of $10.83.
When calculating the cost of a purchase with sales tax and tip, such as in a restaurant, first you calculate the sales tax using the method above, add it to the original price, then calculate the tip based on this new total, and finally add the tip to the total to get the final amount paid. For example, if a meal costs $47.50 and the sales tax is 6%, your sales tax would be 0.06 × $47.50 = $2.85. After adding this to the original price, the subtotal is $50.35. If you then add a 20% tip, you would calculate 0.20 × $50.35 to get $10.07 as the tip amount. Your total amount paid, including sales tax and tip, would be $50.35 + $10.07, which equals $60.42.