Reverse Sales Tax Calculator

On This Page

• How to use this calculator
• What reverse sales tax means
• The reverse sales tax formula
• How to reverse calculate sales tax step by step
• US state sales tax rates reference
• Canadian sales tax (HST, GST, PST)
• Worked examples
• Reverse sales tax in Excel
• Reverse calculate sales tax in QuickBooks
• Frequently asked questions

How to Use This Calculator

This reverse sales tax calculator has two modes. Pick the one that matches what you have on hand.

Mode 1: Find pre-tax price (I know the rate). Enter the total price paid and the tax rate. The calculator returns the pre-tax price and the exact tax amount embedded in the total.

Mode 2: Find tax rate (I know both prices). Enter the total price and the pre-tax price. The calculator works out the tax rate that was applied and the tax amount. Use this when you have an itemised receipt but the rate is not printed on it.

Change the currency selector to match your receipt. Results update instantly as you type.

What Reverse Sales Tax Means

A reverse sales tax calculator works backwards from the total price a customer pays to find the pre-tax price and the tax amount embedded in that total. Standard sales tax adds a percentage on top of a base price. Reverse sales tax strips that percentage back out.

This comes up constantly in real-world accounting: a receipt shows $54.74 and you need to know how much of that is the item price and how much is the state and local tax. A refund calculation, an expense report, a bookkeeping entry: all need the split. Doing it in your head with a standard calculator is easy to get wrong, because most people instinctively divide by the tax rate, which overstates the pre-tax amount.

The same formula applies anywhere a tax-inclusive total needs to be decomposed: VAT in the UK and Europe, HST in Canada, GST in Australia. The math is identical because all these taxes are calculated as a percentage of the pre-tax base, then added to get the total the customer pays.

The Reverse Sales Tax Formula

The key is the divisor: 1 plus the rate expressed as a decimal. At 8% tax, the divisor is 1.08. At 10%, it is 1.10. At Ontario's 13% HST, it is 1.13.

This formula works because the total price is always the pre-tax price multiplied by the same divisor:

Dividing both sides by (1 + rate/100) isolates the pre-tax price. The common mistake is dividing by just the rate (e.g. dividing a $108 receipt by 0.08), which gives $1,350, not $100. The rate must be added to 1 first.

How to Reverse Calculate Sales Tax Step by Step

Three steps to calculate reverse sales tax by hand:

1. Convert the tax rate to a decimal and add 1. For 8%: 0.08 + 1 = 1.08.
2. Divide the total price by that number. $108 ÷ 1.08 = $100.00. That is the pre-tax price.
3. Subtract the pre-tax price from the total. $108 − $100 = $8.00. That is the tax amount.

If you need to reverse calculate sales tax in the other direction (you have both the total and the pre-tax price but need the rate), divide the tax amount by the pre-tax price and multiply by 100:

The calculator above handles both modes. Select "Find tax rate" at the top to switch to this second calculation. For expense reporting and auditing, setting the right selling price to begin with is easier than reversing it later. The Product Pricing Calculator builds tax-inclusive pricing from a base cost and a target margin.

US State Sales Tax Rates Reference

State tax rates for the most frequently searched states. Actual rates include county and city surcharges, so always verify the combined rate for your exact jurisdiction.

New York City adds its own 4.5% city tax on top of the 4% state rate plus a 0.375% Metropolitan Transportation tax, giving an 8.875% combined rate in most of the five boroughs. A $54.74 NYC receipt: $54.74 ÷ 1.08875 = $50.28 pre-tax, $4.46 tax.

New Jersey has a reduced rate of 3.3125% in certain urban enterprise zones. NJ receipts from those zones need the lower divisor.

Canadian Sales Tax: HST, GST, and PST

Canada layers federal and provincial taxes that operate the same way. The reverse formula uses the combined rate as a single divisor.

Quebec applies GST first, then calculates QST on the GST-inclusive amount. The combined effective rate is 14.975% and the reverse divisor is 1.14975. Reverse calculate Quebec sales tax: divide the total by 1.14975 to get the pre-tax price. A $114.98 receipt: $114.98 ÷ 1.14975 = $100.00 pre-tax, $14.98 tax.

For British Columbia, note that PST is 7% but it applies to a narrower range of goods than GST. Some items only carry the 5% GST; others carry the full 12%. Check whether PST applied to that specific item category before using the 12% divisor.

Worked Examples

Example 1: New Jersey receipt, 6.625% rate

A receipt shows $53.25. The sale was in New Jersey at the 6.625% state rate.

1. Divisor = 1 + 0.06625 = 1.06625
2. Pre-Tax = $53.25 ÷ 1.06625 = $49.94
3. Tax Amount = $53.25 − $49.94 = $3.31

Verify: $49.94 × 1.06625 = $53.25. Correct.

Example 2: New York City, 8.875% combined rate

A restaurant bill shows $87.48 in Manhattan, where the combined NYC rate is 8.875%.

1. Divisor = 1.08875
2. Pre-Tax = $87.48 ÷ 1.08875 = $80.35
3. Tax Amount = $87.48 − $80.35 = $7.13

For an accurate tip calculation, tip on the pre-tax amount ($80.35), not the full total.

Example 3: Ontario HST, 13%

A Canadian business expense receipt shows CA$226.00 from Ontario.

1. Divisor = 1.13
2. Pre-Tax = $226.00 ÷ 1.13 = $200.00
3. HST Amount = $226.00 − $200.00 = $26.00

HST-registered businesses can reclaim the $26.00 as an input tax credit (ITC) on their next GST/HST return.

Example 4: Finding the tax rate from two prices

A hotel receipt shows a room rate of $149.00 pre-tax and $168.92 total. What tax rate was applied?

1. Tax Amount = $168.92 − $149.00 = $19.92
2. Tax Rate = $19.92 ÷ $149.00 × 100 = 13.37%

This is typical of hotel taxes, which often stack a state lodging tax, a county tax, and a city occupancy tax into a combined rate well above the standard sales tax rate.

Example 5: California with multiple local add-ons, 9.5% combined

A Los Angeles County purchase shows $65.18 total. The combined rate for that ZIP code is 9.5%.

1. Divisor = 1.095
2. Pre-Tax = $65.18 ÷ 1.095 = $59.52
3. Tax Amount = $65.18 − $59.52 = $5.66

Verify: $59.52 × 1.095 = $65.18 (rounding to cents). For business tax filings and reconciling collected sales tax against total revenue, the Gross Profit Calculator can help separate tax-inclusive revenue from actual taxable margin.

Reverse Sales Tax Formula in Excel

With the total price in cell A1 and the tax rate (as a percentage, like 8) in cell B1:

To reverse calculate sales tax across a column of receipts: put the total column in A, a fixed rate in B1, and in C2 enter =A2/(1+$B$1/100) then drag down. The dollar signs on $B$1 lock the rate cell while the row increments. Format C and D as currency.

For mixed rates across rows (different stores or states): put each rate in its own B column cell, remove the dollar signs from B1, and the formula auto-picks each row's rate.

To reverse calculate Quebec sales tax with the exact combined rate of 14.975%: use =A1/1.14975 directly, or store 14.975 in B1 and use =A1/(1+B1/100).

Reverse Calculate Sales Tax in QuickBooks

QuickBooks does not have a dedicated "reverse sales tax" button, but you can reverse calculate sales tax on purchases using the tax-inclusive entry method.

When entering a purchase or bill, select the relevant tax code for the transaction, then tick the "Tax Inclusive" or "Amounts are tax inclusive" checkbox (the exact label varies by version). QuickBooks will back-calculate the pre-tax amount and the tax portion from the total you enter. The tax amount posts to the correct tax liability account automatically.

For inventory purchases where the supplier charged tax: enter the invoice total, mark it as tax-inclusive, and QuickBooks records the inventory asset at the pre-tax cost, not the total paid. This matters for cost of goods sold (COGS) accuracy. Overstating inventory cost by the tax amount will understate margin in every downstream report.

For expense categories not covered by the automatic method, enter the pre-tax amount from this calculator manually. Then add the tax on a second line to the appropriate sales tax payable account. The two lines should sum to the receipt total.

For businesses tracking revenue that already includes tax (like online marketplace sales that remit tax separately), use the pre-tax revenue figure for income reporting, not the gross amount. For a clean margin view on those sales, the Profit Margin Calculator accepts pre-tax revenue directly.

Frequently Asked Questions

How do you reverse calculate sales tax?

Divide the total price by (1 + tax rate as a decimal). At 8%: total ÷ 1.08 = pre-tax price. Then subtract: total − pre-tax = tax amount. Do not divide by just the rate (0.08), because that gives the wrong answer when the rate is expressed as a percentage of pre-tax, not of total.

How do I calculate reverse sales tax on a receipt?

Find your combined state and local rate (state rate + county + city add-ons), form the divisor (1 + rate/100), divide the receipt total by the divisor to get the pre-tax amount, then subtract to get the tax. Use the calculator on this page to do it instantly: enter the total and the rate, and the pre-tax price and tax amount appear right away.

What is the reverse sales tax formula?

Pre-Tax Price = Total Price ÷ (1 + tax rate/100). Tax Amount = Total Price − Pre-Tax Price. If you know both prices but not the rate: Tax Rate % = (Total − Pre-Tax) ÷ Pre-Tax × 100.

How do you reverse calculate sales tax in Excel?

Put the total in A1 and the rate in B1 (as a number like 8, not 0.08). In C1 enter =A1/(1+B1/100) for the pre-tax price. In D1 enter =A1-C1 for the tax amount. The Excel section above shows a complete five-row example with a verification formula.

How do you reverse calculate New Jersey sales tax?

New Jersey's state rate is 6.625%. Divisor = 1.06625. Pre-Tax = Total ÷ 1.06625. Example: $53.25 ÷ 1.06625 = $49.94 pre-tax, $3.31 tax. Some NJ Urban Enterprise Zones use 3.3125% (half the standard rate), so check the store's location first.

How do you reverse calculate New York sales tax?

New York state rate is 4%, but counties and NYC add more. NYC combined rate is 8.875% (divisor 1.08875). Upstate counties typically run 8–8.75%. Enter your exact ZIP code rate in the calculator, or use the NYC divisor for any Manhattan or five-borough purchase. Example: $87.48 ÷ 1.08875 = $80.35 pre-tax.

How do you reverse calculate Texas sales tax?

Texas state rate is 6.25%, most cities add 2%, giving 8.25% in Dallas, Houston, San Antonio, and Austin. Divisor = 1.0825. Example: $108.25 ÷ 1.0825 = $100.00 pre-tax, $8.25 tax. Some smaller jurisdictions are below 8.25% if their combined local rate is under 2%.

How do you reverse calculate Ontario or Quebec sales tax?

Ontario HST: divisor 1.13. Example: $226.00 ÷ 1.13 = $200.00 pre-tax, $26.00 HST. Quebec: divisor 1.14975 (combined GST + QST). Example: $114.98 ÷ 1.14975 = $100.00 pre-tax, $14.98 tax. British Columbia: GST + PST = 12%, divisor 1.12. Alberta: GST only = 5%, divisor 1.05.

Why should I tip on the pre-tax amount, not the total?

Tipping on the pre-tax amount is the standard convention because the tax is not part of the service. On a $87.48 NYC bill, the pre-tax food total is $80.35. A 20% tip on $80.35 = $16.07, versus 20% on $87.48 = $17.50. Both are acceptable, but tipping on the pre-tax is the traditional baseline, and restaurants that add automatic gratuity typically apply it to the pre-tax subtotal.

Is reverse sales tax the same as tax-inclusive pricing?

Yes, in effect. Tax-inclusive (or tax-inclusive pricing) means the quoted price already includes the tax. Reverse sales tax is the calculation that extracts the components from a tax-inclusive total. You are solving for the embedded price that, once tax is added, equals the amount the customer paid.

Can I use this for VAT in the UK or Europe?

Yes. The math is identical. UK standard VAT rate is 20%, divisor 1.20. Germany and France: 19% and 20% respectively. A £120 UK purchase at 20% VAT: £120 ÷ 1.20 = £100 net price, £20 VAT. Enter the VAT rate in the calculator just as you would a US sales tax rate. For businesses reclaiming input VAT, the net amount (£100) is the deductible cost, and the VAT amount (£20) is the reclaim on the return.

References

• State and Local Sales Tax Rates, Tax Foundation: authoritative annual table of state sales tax rates, average local rates, and combined rates by state.
• GST/HST for Businesses, Canada Revenue Agency: official CRA guidance on collecting, remitting, and recovering Canadian sales taxes including input tax credits.
• Sales Tax, Investopedia: overview of US sales tax structure, state-by-state variation, and nexus rules.