Tax Rate

What is a tax rate?

A tax rate is the percentage used to calculate tax owed. If the sales tax rate is 8% and you sell something for $100, the tax is $8. Tax rates vary widely depending on the type of tax, your location, and your income level (for income taxes).

Types of tax rates

Different taxes use different rate structures:

• Sales tax — Usually a flat percentage that varies by state and locality
• Income tax — Often progressive (higher rates on higher income)
• Self-employment tax — Currently 15.3% on net self-employment income
• Property tax — Varies by jurisdiction, applied to assessed property value

Finding the right rate

For sales tax, you need to apply the correct rate for where the sale occurs. This can be complex if you sell to customers in different locations. For income tax, your rate depends on your taxable income and filing status. Tax software or an accountant can help ensure you're using correct rates.