1. Sales Tax, Discounts, & Commission

2. Sales Tax
Calculated based on the cost of the item or service you are purchasing
Is a percentage of the original cost

3. Finding Sales Tax
To find sales tax, multiply the percentage of tax by the original price
Example: Original Price = $10; Sales tax = 9%
10 x .09 = $0.90
To find the price after tax, add the sales tax to the original price.
Price after tax = $ = $10.90

4. Example
You buy a car for $20,000 and pay 5 % in tax. How much is the tax?
Tax = 20,000 x 5% = 20,000 times 0.05
Tax = 20,000 x 0.05 = 1,000 dollars.
So, the cost with tax is $20,000 + $1000
= $21,000

5. Commission
Commission is a fee which a salesperson would receive upon completion of a sale. Commission can be based on either the Mark- up or the sales price. ONLY BASE COMMISSION ON MARK-UP IF THE INSTRUCTIONS SAY SO.
It is a motivational system of payment designed to encourage sales staff to sell more
We calculate commission similar to how we calculate sales tax

6. example
Sally works in a perfume shop. For every bottle of perfume she sells, she receives 2.5% commission. One day she made $450 in sales.
How much commission did she make?

7. example
Sally works in a perfume shop. For every bottle of perfume she sells, she receives 2.5% commission. One day she made $450 in sales. How much commission did she make?
$450 x 2.5%
= $450 x 0.025
= $11.25
Therefore, Sally makes $11.25 off $450 of perfume sales.

8. Markups
A markup is the difference between the buying price (the cost for a store to buy an item) and the selling price
This is called a “markup”
Markups are calculated like tax and added to the buying price.

9. Example
If the original price on a computer is $500 and is marked up by 45%, how much is the selling price of the computer?
500 x .45 = 225
Selling price = = $725

10. Example
The buying price on a car is $4,000. A dealership has a markup that is 60%.
What is the selling price of the car?
If Jake sells a car and receives 20% commission, how much money does he earn?

11. Profit Profit = how much a business makes off of a sale
To find profit, you need to subtract the Markup by commission.
If there is no commission, the markup is the profit.

12. Example Buying price = $60 Markup = $108 Commission = $50
Profit = Markup – Commission
Profit = 108 – 50 = $58