For example, we used to use WHMCS tax to do this, and a product that is $7.77 + 3% came out to $8.00. Which is correct. Your system calculates 3% of $7.77 as $0.24 instead of $0.23 which is incorrect, you are a penny off which kills existing paypal subscriptions because they are now a penny off.
$7.77 * 0.03 is 0.2331 and should equal $0.23, not $0.24.