Expense reports, bookkeeping and price comparisons often start with a total that already includes sales tax. To recover the original price you need to divide, not subtract — and this calculator does that for any rate, including state and local rates listed separately.
How to use the reverse sales tax calculator
- Enter the total paid, including tax.
- Enter the sales tax rate. If your receipt shows state and local tax separately, put the second one in additional local rate and the calculator will combine them.
- Read the price before tax on the tape, along with the tax that was included and a check that re-applies the rate.
Reverse sales tax formula
The included tax is a fraction of the total equal to Rate ÷ (100 + Rate). At 7.5% that is 7.5 ÷ 107.5 ≈ 6.98% of the total, not 7.5%.
Worked example
You spent $53.75, and the local sales tax rate is 7.5%.
Divisor = 1 + 0.075 = 1.075
Price before tax = 53.75 ÷ 1.075 = $50.00
Tax included = 53.75 − 50.00 = $3.75
Check: 50.00 × 7.5% = $3.75 ✓
Compare that with the common shortcut of multiplying the total by the rate: 53.75 × 0.075 = $4.03, which overstates the tax by 28 cents and understates the price.
Pre-tax price of $100 total at common rates
| Tax rate | Price before tax | Tax included |
|---|---|---|
| 5% | $95.24 | $4.76 |
| 6% | $94.34 | $5.66 |
| 7% | $93.46 | $6.54 |
| 7.5% | $93.02 | $6.98 |
| 8.25% | $92.38 | $7.62 |
| 9.5% | $91.32 | $8.68 |
| 10% | $90.91 | $9.09 |
When you need a reverse calculation
Expense reports and bookkeeping
Many accounting systems record the net purchase price and the sales tax in separate accounts. If you only kept the card statement total, dividing out the tax gives both figures.
Business owners collecting tax
Some sellers, such as market vendors or event sellers, charge round tax-inclusive prices. A booth that charges $20.00 “tax included” in a 6.25% area keeps 20 ÷ 1.0625 = $18.82 and owes $1.18 of tax on each sale.
Comparing prices across places
A $1,083 tax-included price in an 8.3% jurisdiction is the same as $1,000 before tax. Working backward lets you compare offers on equal terms, especially when buying across state lines.
Multiple items
When a receipt mixes taxable and tax-exempt items, back the tax out of the taxable subtotal only. Dividing the whole total would understate the pre-tax price of the taxable items.
To go forward instead, use the sales tax calculator. For a specific state’s rate, the state sales tax calculator has the current state and average local rates built in.
Results are estimates. Rounding rules and taxability vary by state; your receipt and state revenue department are the authoritative sources.
Frequently asked questions
How do I remove sales tax from a total?
Divide the total by 1 plus the tax rate as a decimal. For a $53.75 total at 7.5%, the pre-tax price is 53.75 ÷ 1.075 = $50.00 and the tax is $3.75.
Why can't I just subtract the tax rate from the total?
The rate was applied to the pre-tax price, not to the total. Multiplying $53.75 by 7.5% gives $4.03, which is too much; the correct tax is $3.75. The included tax is always a smaller share of the total than the rate itself.
Why does my result differ from the receipt by a cent?
The original tax was rounded to the cent, so dividing the total recovers the price only to within half a cent. The calculator rounds to the nearest cent and shows a check line so you can see any one-cent difference.
Can I use this for VAT or GST?
Yes, the math is identical for any tax added as a percentage of the price. For GST presets in India, Australia, Canada and New Zealand, the GST calculator also splits the tax into its components.