Grade by Grade
F. Financial Literacy · Money and Finances: Moving Money, Sales Tax, Budgets, Credit and Best Value

Sales Tax: Adding HST to a Purchase

F1.2 A1About 45 minutes
Learning goals
  • I can explain what sales tax is and why the price at the till is more than the price on the tag.
  • I can find 13% HST on a price using 13¢ for every dollar, or a tenth plus 3 hundredths.
  • I can use a calculator to find HST on prices with cents and round to the nearest cent.
  • I can estimate and calculate the total cost of a purchase, including HST.

Words to know

sales tax
Money added to the price of many things you buy. Stores collect it and send it to the government.
HST
Harmonized Sales Tax. In Ontario it is 13%: a 5% federal part and an 8% provincial part combined into one tax.
percent (%)
Out of 100. 13% means 13 out of every 100, so 13 cents out of every 100 cents (every dollar).
subtotal
The total of the prices before tax is added.
round to the nearest cent
Keep two digits after the decimal point. Look at the third digit: 5 or more, round up; less than 5, keep the cents the same.

Wait, that's not the price on the tag!

Zach saved exactly $30 to buy a board game. The tag says $30.00. At the till, the cashier says, "That will be $33.90, please."

Zach is surprised. Where did the extra $3.90 come from?

It is sales tax. In Canada, the price on a shelf tag usually does not include sales tax. The tax is added when you pay.

What is HST?

In Ontario, the sales tax is called HST (Harmonized Sales Tax). It is 13%.

% means out of 100. So 13% means 13 cents for every 100 cents, or 13¢ for every $1.

HST has two parts put together: 5% goes to the federal government (the Government of Canada) and 8% goes to the Ontario government. Governments use tax money to help pay for things everyone shares, like schools, hospitals, roads and parks.

Not everything has HST. Basic groceries, like milk, bread, eggs, and fresh fruit and vegetables, have no HST. Things like toys, games, sports equipment, chips, candy and pop do have HST.

price: $1.00 = 100¢+HST: 13¢5¢ for Canada8¢ for Ontario=$1.13total
For every 100¢ of price, HST adds 13¢: 5¢ goes to the Government of Canada and 8¢ goes to the Government of Ontario.
Price $20.00HST $2.60Total you pay: $22.6013 cents of tax for every dollar
A $20.00 item plus $2.60 HST costs $22.60.
PriceHST (13¢ per dollar)Total
$1.00$0.13$1.13
$2.00$0.26$2.26
$5.00$0.65$5.65
$10.00$1.30$11.30
$20.00$2.60$22.60
$50.00$6.50$56.50
$100.00$13.00$113.00
HST on some friendly prices.

Strategy 1: 13¢ for every dollar

For a whole-dollar price, multiply the number of dollars by 13 cents.

$30: 30 × 13¢ = 390¢ = $3.90. Total: $30.00 + $3.90 = $33.90. That's Zach's mystery!

Strategy 2: A tenth, plus 3 hundredths

13 cents per dollar = 10 cents per dollar + 3 cents per dollar.

  • 10 cents per dollar is one tenth of the price. Divide by 10.
  • 1 cent per dollar is one hundredth of the price. Divide by 100, then multiply by 3.

Strategy 3: Use a calculator for tricky prices

For a price with cents, multiply the price by 0.13 on a calculator. The answer often has more than two decimal places, so round to the nearest cent.

Worked example

Example 1: A tenth plus 3 hundredths

Amir buys a flashlight ($12) and batteries ($6) for a camping trip. Find the HST and the total.

  1. Add the prices first. Subtotal: $12 + $6 = $18.
  2. A tenth of $18: $18 ÷ 10 = $1.80.
  3. A hundredth of $18: $18 ÷ 100 = $0.18. Three hundredths: 3 × $0.18 = $0.54.
  4. HST: $1.80 + $0.54 = $2.34. (Check with Strategy 1: 18 × 13¢ = 234¢. ✔)
  5. Total: $18.00 + $2.34 = $20.34.

HST is $2.34. The total is $20.34.

Worked example

Example 2: Prices with cents (calculator)

Hana buys a paint set ($8.49) and a drawing pad ($5.75). Find the total with HST.

  1. Subtotal: $8.49 + $5.75 = $14.24.
  2. Estimate the tax: 13¢ for each of about 14 dollars is about $1.82, so close to $1.80.
  3. Calculator: 14.24 × 0.13 = 1.8512.
  4. Round to the nearest cent. Look at the third decimal digit: 1.8512. It is 1, less than 5, so keep $1.85.
  5. Total: $14.24 + $1.85 = $16.09.

HST is $1.85. The total is $16.09.

Worked example

Example 3: Is $50 enough?

Headphones are on sale for $44.99. Mila has $50. Can she buy them?

  1. The price is under $50, but don't forget the tax!
  2. Estimate: the price is about $45. 45 × 13¢ = 585¢ = about $5.85. $45 + $5.85 is about $50.85. That is more than $50.
  3. Exact: 44.99 × 0.13 = 5.8487. The third decimal digit is 8, so round up: $5.85.
  4. Total: $44.99 + $5.85 = $50.84.

No. With HST the headphones cost $50.84. Mila is 84¢ short.

Worked example

Example 4: Tax, then cash rounding

Hana (from Example 2) pays her $16.09 total with a $20 bill. What is her change?

  1. She pays cash, so round the total to the nearest 5 cents. The last digit is 9, so round up: $16.10.
  2. Count up: $16.10 → $17.00 is $0.90. $17.00 → $20.00 is $3.00.
  3. Change: $0.90 + $3.00 = $3.90.

Her change is $3.90.

Quick estimate for HST

HST is a bit more than a tenth of the price. So for a quick estimate, find a tenth and add a little more. For example, on a $40 item, a tenth is $4, so the tax is a little more than $4. (It is exactly $5.20.)

Or remember: about $1.30 for every $10.

Order of steps

  1. Add the prices to get the subtotal.
  2. Find the HST on the subtotal and round to the nearest cent.
  3. Add the HST to get the total.
  4. If paying cash, round the total to the nearest 5 cents.

In this lesson, every item has HST unless the question says otherwise.

Just for fun

Zach's mystery, solved: the board game didn't grow more expensive on the walk to the till. It just picked up a 13% travel buddy called HST!

Hands-on activity

Receipt and flyer detective

You need: a few store receipts, a store flyer (paper or online), paper, a pencil and a calculator.

Part 1: Receipts. Find the subtotal, the HST line and the total on each receipt. Use a calculator: multiply the subtotal of the taxed items by 0.13. Do you get the HST on the receipt? (If a receipt has some untaxed groceries, the HST will be less than 13% of the whole subtotal. Many receipts mark the taxed items with a letter or symbol. Can you find it?)

Part 2: Flyer shopping. You have $50 to spend on things that have HST (toys, games, sports gear). Choose items, find the subtotal, add HST and check that the total is $50 or less.

What to look for: tax rounded to the nearest cent, and totals that include the tax.

Grown-up note: cross out any card numbers or personal information on receipts first.

Your turn

1

What is the HST on $1? On $6?

2

Find the HST and total for a $10 item.

3

Find the HST and total for a $25 soccer ball.

4

Use a tenth plus 3 hundredths to find the HST on $40.

5

Round to the nearest cent: $2.4675 and $0.8931.

6

A water bottle costs $6.99. Use a calculator to find the HST and the total.

7

Is $20 enough for a puzzle priced $18.00?

More practice: warm-up

1

HST on $2?

2

HST on $3?

3

HST on $5?

4

HST on $100?

5

Which one has no HST: a carton of milk or a bag of chips?

More practice: on your own

1

A jigsaw puzzle ($15) and markers ($7). Find the subtotal, HST and total.

2

A family buys a tent for $60. Find the total with HST.

3

A bead kit ($3.49) and craft string ($2.25). Use a calculator to find the total with HST.

4

Jaden says the HST on $30 is $39. What mistake did he make?

5

Estimate the total for a $79 item with HST. Then find the exact total.

Challenge

1

Sara has $50. She wants a $20 skipping-rope set and a $24 frisbee set. Is $50 enough once HST is added? How much is left?

2

A calculator shows that the HST on $9.99 is 1.2987. Why do you pay $1.30 in tax and not $1.29?

3

Store A sells a sled for $35 plus HST. Store B sells the same sled for $39.50 with tax already included. Which is cheaper, and by how much?

Check your understanding

Quiz

1.

What is the HST rate in Ontario?

2.

What is the HST on a $10 item?

3.

What is the total cost of a $20 item with HST?

4.

Round $1.8475 to the nearest cent.

5.

Which of these usually has no HST in Ontario?

6.

Is $30 enough for an item priced $27 before tax?

For parents and teachers

What your child is learning: Ontario's Grade 5 expectation F1.2 includes sales tax in the cost of transactions. Ontario's HST is 13% (5% federal GST plus 8% provincial). Grade 5 students haven't formally studied percents, so this lesson treats 13% as 13 cents for every dollar and as a tenth plus 3 hundredths, and uses a calculator for prices with cents, rounding to the nearest cent. Estimating first and checking reasonableness are part of A1.

Common difficulties:

  • Forgetting the tax when deciding whether there is enough money.
  • Units: 30 × 13 = 390 means 390 cents ($3.90), not $390 or $39.
  • Rounding to the nearest cent: look at the third decimal digit only.
  • Mixing up the two kinds of rounding: tax is rounded to the nearest cent; a cash total is then rounded to the nearest 5 cents.

Good to know: some items are taxed differently. Basic groceries have no HST, and a few items (such as printed books and children's clothing) get an Ontario rebate at the till, so only the 5% federal part is charged. The practice questions use items that are charged the full 13%. Looking at real receipts together is one of the best ways to make this concrete.