Result
Tax savings
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Tax savings = deductible expense × income tax rate ÷ 100. The logic is simple: if an expense lowers taxable profit, the tax owed drops by exactly that share of the expense — that's the tax savings, not the whole expense itself.
An expense saves money on tax but doesn't replace the expense: if something costs $1,000 and lowers tax by $200 at a 20% rate, the company still actually spends $1,000, not $800 — the savings only partly offset the cost.
The same principle already applies in the separate leasing tax savings calculator — that one is specific to lease payments, while this is a universal formula for any deductible expense: advertising, rent, employee training, and so on.