Short answer
Money problems at KS3 use the four operations in everyday contexts — paying for goods, giving change, calculating VAT, splitting bills. The key skills are adding decimals accurately, finding percentages of amounts, and checking answers are reasonable.
At a glance
- Key stage
- Key Stage 3
- Subject
- Number
- Type
- Guide
- For
- Students
- Read time
- 4 min
- Last updated
- 21 October 2026
Where this fits
- Key Stage 3Years 7–9This article
- GCSEYears 10–11
How do you add up a receipt or shopping total?
List every item price in a column, aligning the decimal points, and add carefully. Double-check by rounding each price to the nearest pound first to estimate the total.
Worked example: A till receipt shows: milk £1.09, bread £1.45, apples £2.30, yoghurt £0.89. Find the total.
1.09
1.45
2.30
+ 0.89
------
5.73
Estimate: £1 + £1 + £2 + £1 = £5. Actual £5.73 — reasonable. ✓
Common error: forgetting to align decimal points when adding, which shifts digits into the wrong column.
How do you calculate change?
Change = amount paid − total cost
Subtract the cost from the note or coin used. A reliable mental method is to count up from the cost to the amount paid.
Worked example: Total = £8.73. Paid with a £20 note.
Count up: £8.73 → £9.00 (27p) → £10.00 (£1.00) → £20.00 (£10.00). Change = £0.27 + £1.00 + £10.00 = £11.27
Check: £20.00 − £8.73 = £11.27 ✓
How do you calculate VAT?
VAT (Value Added Tax) in the UK is currently 20%. It is added to the pre-tax price of most goods and services.
| Method | Calculation |
|---|---|
| Find VAT amount | 20% of pre-tax price = pre-tax × 0.2 |
| Find total price | pre-tax × 1.2 |
| Find pre-tax from total | total ÷ 1.2 |
Worked example 1: A chair costs £85 before VAT. Find the total price including 20% VAT.
Total = £85 × 1.2 = £102
Worked example 2: A laptop is priced at £540 including VAT. Find the pre-tax price.
Pre-tax = £540 ÷ 1.2 = £450
Worked example 3: What is the VAT amount on a £260 item?
VAT = 20% of £260 = £260 × 0.2 = £52
How do you split a bill equally?
Divide the total by the number of people. If the division leaves a remainder (e.g. £17.50 ÷ 3), round to the nearest penny and note that one person may pay 1p more.
Worked example: Four friends share a restaurant bill of £67.60. Each leaves a 10% tip. How much does each person pay in total?
- Tip = 10% of £67.60 = £6.76
- Grand total = £67.60 + £6.76 = £74.36
- Each person pays = £74.36 ÷ 4 = £18.59
How do you plan a simple budget?
A budget lists income and expenses to check whether you have enough money. The key principle: income ≥ total expenses.
Worked example: Mia has £60 weekly pocket money. She wants to save 30%, spend 25% on food, and the rest on entertainment. How much is left for entertainment?
| Category | Calculation | Amount |
|---|---|---|
| Savings | 30% × £60 = 0.3 × 60 | £18.00 |
| Food | 25% × £60 = 0.25 × 60 | £15.00 |
| Entertainment | 60 − 18 − 15 | £27.00 |
Check: £18 + £15 + £27 = £60 ✓
How do you compare prices to find the best deal?
Find the unit price — the cost per single item or per 100 g — and compare.
Worked example: Brand A: 6 cans for £3.90. Brand B: 8 cans for £5.12. Which is better value?
- Brand A: £3.90 ÷ 6 = 65p per can
- Brand B: £5.12 ÷ 8 = 64p per can
Brand B is slightly cheaper per can — better value if you use all 8.
Frequently asked questions
Why do prices sometimes look different — £3.99 vs £4.00?
Retailers use "charm pricing" (e.g. £3.99 instead of £4.00) to make prices look lower. For calculation purposes, treat £3.99 as £4.00 minus 1p — this makes estimating totals quicker and reduces the chance of errors.
How do I check if a discount has been applied correctly?
Multiply the original price by the discount percentage to find the discount amount, then subtract. Example: 15% off £240 = 0.15 × 240 = £36 discount; final price = £204. Compare this to the advertised sale price — if they match, the discount is correct.
What does it mean when a price is "ex-VAT"?
"Excluding VAT" means the price shown does not include VAT — you must add 20% to find the total. "Including VAT" or "inc. VAT" means VAT is already in the price. Always check which applies before calculating.
How do I work out what percentage a discount is?
Percentage discount = (discount amount ÷ original price) × 100. Example: an item was £80 and is now £60; discount = £20; percentage = (20 ÷ 80) × 100 = 25% off.
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Key terms
- Common error
- VAT
- budget
- unit price