Identify the tax type (income, sales/VAT, property, payroll, capital gains, etc.)
Determine the applicable tax jurisdiction (country, state/province, city)
Confirm the tax year/period and the tax filing status (if applicable)
Gather required inputs (income amounts, deductions/credits, taxable base, rates, exemptions)
Determine the taxable amount using the tax rules (e.g., gross income minus deductions, or price minus exclusions)
Apply the correct tax rate or bracket to the taxable amount
If using brackets, calculate tax per bracket and sum the results
If there are thresholds or phase-outs, apply them to adjust the taxable amount or rate
Apply any credits (subtract credit amounts from calculated tax)
Apply any surtaxes or additional taxes (add to the tax after base tax and credits as required)
Account for withholding or prepayments (subtract amounts already paid)
Apply penalties/interest if required (add if applicable)
Compute the final amount due or refund (tax due minus payments; if negative, refund)
For sales/VAT: compute tax as taxable price × tax rate, then add to price if needed
For payroll: compute employee withholding per payroll period using the relevant withholding tables or formulas
For capital gains: separate short-term vs long-term (if applicable) and apply the corresponding rate rules
For property: use assessed value × assessment ratio × local tax rate (plus any special levies)
Verify with official tax tables/calculators or tax software for the jurisdiction and tax year
Record the tax calculation inputs and results for filing and audit support