1. What is TPS?

TPS (Taxe sur les Produits et Services) is a Canadian value-added tax of 5% applied to most goods and services in Canada.

2. How Does the Calculator Work?

The calculator uses the TPS equation:

Where:

• \( Price \) — The pre-tax price in Canadian dollars (CAD)
• \( 0.05 \) — The TPS rate (5%)

3. Importance of TPS Calculation

Details: Calculating TPS is essential for accurate pricing, accounting, and financial planning for both businesses and consumers in Canada.

4. Using the Calculator

Tips: Enter the pre-tax price in Canadian dollars. The calculator will compute the 5% TPS amount.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between TPS and TVQ?
A: TPS is the federal 5% tax, while TVQ is the provincial Quebec tax (9.975%). This calculator only computes TPS.

Q2: Are all products subject to TPS?
A: No, some items like basic groceries, prescription drugs, and medical devices are exempt.

Q3: How is TPS different from sales tax in other provinces?
A: TPS is the federal component that applies nationwide, while provinces may add their own sales tax.

Q4: Do businesses pay TPS?
A: Businesses pay TPS on purchases but can generally claim input tax credits to recover these amounts.

Q5: When should TPS be calculated?
A: TPS should be calculated on all taxable supplies at the time of sale or invoice.