Reverse Sales Tax Calculator

What exact formula does this tool use?

This tool divides the tax-inclusive total by one plus the rate as a decimal to get the pre-tax price, then subtracts that price from the total to get the tax amount. For a total of 107.50 at 7.5%, it divides by 1.075 to get 100.00, so the tax is 7.50. The tool has no built-in rates, jurisdiction or tax year: the only tax figure used is the rate you type.

Why not just take the tax rate off the total?

Because the rate applies to the pre-tax price, not to the total. With a 10% rate and a total of 110, taking 10% of 110 gives 11 and a pre-tax price of 99, while the correct split is 100 and 10. The tool divides by 1.10, so the pre-tax price is 100.00 and the tax is 10.00.

What does the Tax as % of Total line mean?

It is the tax amount divided by the tax-inclusive total, sometimes called the tax fraction. At a 20% rate it shows 16.67%, because the tax is one sixth of the total. At 18% it shows 15.25%. It is always smaller than the rate you entered unless the rate is zero, and it is the figure to use when you only know the receipt total.

What happens with a zero rate or a zero total?

A rate of zero is accepted and returns the total as the pre-tax price with zero tax. A cleared rate box is also read as zero. A total that is zero (which is what a cleared total box becomes) or negative, or a negative rate, returns an error message asking for a positive total and a non-negative rate. Non-numeric input also returns the error rather than a not-a-number result.

How do I handle two taxes on the same purchase?

The tool takes one rate. If both taxes apply to the pre-tax price, add the percentages and enter the sum. If the second tax is charged on a price that already includes the first, combine them as one plus the first rate, multiplied by one plus the second rate, minus one, and enter that percentage. Check your receipt to see which structure applies; the tool cannot tell.

Why can my receipt differ from the result by a cent?

The tool works on the exact division and rounds only what it displays, to two decimals. A seller who rounds tax on each line item, or rounds the tax before adding it, can produce a receipt that differs by a cent or more from a single calculation on the total. When several items carry different rates, run each item separately.

Does the tool know whether a rate is correct for my purchase?

No. It does not look up sales tax, VAT or GST rates, does not check exemptions, and does not decide which rate applies to a particular item or place. Rates and rules change, and the tax authority or a qualified adviser decides what applied to a given sale. The tool only does the arithmetic with the rate you give it, which makes it a way to check a receipt, not a source of rates.