Dropshipping Tax Calculator
Inclusive pricing takes it out of your revenue.
Tax you must remit
$8,000
taken out of your prices
With tax-inclusive prices the $8,000 comes out of your revenue, not the customer's pocket — so your real revenue is $40,000. Extracting it means dividing by 1.20, not multiplying by 20%.
How the Dropshipping Tax Calculator works
If your prices are tax-inclusive, the tax comes out of your revenue rather than the customer's pocket — and extracting it means dividing by one plus the rate, not multiplying by the rate. Overseas suppliers also rarely provide reclaimable input tax, so there is usually nothing to offset it with.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
Do dropshippers have to charge tax?
Yes, wherever you have a tax obligation — which depends on where you are established and where your customers are. Selling from a store you own means the obligation is yours, not the supplier's.
Can I reclaim tax on supplier purchases?
Rarely, when the supplier is overseas and not charging you domestic tax. That means the tax you collect is a real cost against inclusive prices rather than a pass-through.
How do I extract tax from an inclusive price?
Divide by one plus the rate. At 20%, divide by 1.2 — the tax inside a £120 price is £20, not £24.
What about import duty on customer orders?
If parcels ship directly from overseas, the customer may be billed duty on delivery. That produces refusals and complaints, and it is a reason to price DDP or source domestically.