What this calculator computes
This is a gain-and-net-proceeds calculator with a user-supplied tax rate. It takes four inputs: purchase price, sale price, transaction costs, and a tax rate you enter yourself. The gain is sale price minus purchase price minus costs. Tax is the gain multiplied by the rate, applied only when the gain is positive. Net proceeds are sale price minus costs minus tax.
It deliberately does not pick a rate for you. Capital gains rates depend on your country, your total taxable income, how long you held the asset, the asset class, and in some jurisdictions on inflation indexation or a partial exclusion. Any calculator that guessed a rate from a sale price alone would be wrong for most users, so this one asks you to supply the rate that applies to your situation.
The default rate shown is 15 percent, which corresponds to the middle long-term capital gains rate in the United States federal schedule. It is a placeholder, not a recommendation, and should be replaced with the rate that actually applies to you.
A worked example
Suppose you bought shares for 10,000, sold them for 15,000, and paid 200 in brokerage commissions and fees across both transactions. The gain is 15,000 minus 10,000 minus 200, which is 4,800. Note that the costs reduce the taxable gain, which is why entering them matters: ignoring the 200 would overstate the gain and, at a 15 percent rate, overstate the tax by 30.
Tax at 15 percent is 4,800 times 0.15, or 720. Net proceeds are 15,000 minus 200 minus 720, which is 14,080. That 14,080 is the cash that ends up in your account after the sale settles and the tax is paid.
Read the net proceeds figure carefully. It is cash received, not profit. The profit after tax on this trade is 4,800 minus 720, or 4,080, because 10,000 of the 14,080 is your own capital coming back. Confusing net proceeds with profit is the most common misreading of this output.
Cost basis: what belongs in the purchase price
The purchase price field should hold your cost basis, which is generally what you paid plus acquisition costs. For shares, that means the price plus any purchase commission. For property, basis typically includes purchase costs such as legal fees and transfer taxes, and is increased by capital improvements over the holding period while ordinary repairs and maintenance are not added.
If you bought the same security in several lots at different prices, the basis depends on which lots you sold and on the identification method your jurisdiction allows, such as specific identification, first in first out, or an average cost rule. The tool assumes a single purchase and a single sale, so for multiple lots you should calculate each disposal separately or enter a correctly computed aggregate basis.
Inherited and gifted assets follow special basis rules that this tool does not model. Depending on the jurisdiction, inherited assets may receive a basis reset to market value at the date of death, while gifted assets often carry over the donor's original basis. Entering the wrong basis is the single largest source of error in a capital gains calculation.
Picking a rate: holding period and income level
In the United States, the federal rate depends on holding period. Assets held one year or less are short-term and taxed at ordinary income rates, which run up to 37 percent. Assets held longer than a year are long-term and taxed at 0, 15, or 20 percent depending on taxable income, with collectibles and certain real estate depreciation recapture taxed under separate rules. High-income filers may additionally owe the 3.8 percent Net Investment Income Tax, which you would need to fold into the rate you enter.
Other countries structure this differently. The United Kingdom applies capital gains tax rates that depend on the taxpayer's income band and the asset type, with an annual exempt amount deducted first. Australia allows a discount on gains from assets held longer than twelve months for individuals. Germany applies a flat withholding rate to most investment income. Canada includes a portion of the capital gain in taxable income rather than applying a separate rate.
None of these regimes are built into the tool. You compute or look up the effective rate that applies to your gain and enter it. Where an annual exemption or allowance applies, subtract it from the gain before deciding on a rate, or accept that the calculation will overstate tax on a gain that falls partly within the exempt amount.
What is not modelled
Losses are not carried anywhere. If the sale price is below the purchase price, the calculator shows a negative gain and zero tax, which is correct as far as it goes, but it does not net that loss against other gains or carry it forward to future years. Most tax systems allow both, and both can materially change what you owe.
There is no annual exemption, no indexation for inflation, no principal residence exclusion, no like-kind or rollover deferral, and no tax-advantaged account handling. A gain realised inside a retirement account or an ISA is typically not taxed at the time of sale at all, in which case the appropriate rate to enter is zero.
State, provincial, and local taxes are not separate lines. If your jurisdiction taxes capital gains at a sub-national level as well, combine the rates before entering them. The result is an estimate for a single disposal, and an actual filing should be prepared from your own records or by a tax professional.