How to Calculate Reverse Sales Tax
What is Reverse Sales Tax?
A reverse sales tax calculator finds the pre-tax price when you know the total amount paid (including tax) and the tax rate. If you paid $108 with 8% tax, the original price was $108 / 1.08 = $100.
Step-by-Step Guide
- 1Pre-tax price = Total price / (1 + tax rate)
- 2Tax amount = Total price − Pre-tax price
- 3Or: Tax amount = Total price × (tax rate / (1 + tax rate))
- 4Example: $108 total, 8% tax: $108 / 1.08 = $100 pre-tax
Worked Examples
Input
Total $54, tax rate 8%
Result
Pre-tax = $50, tax = $4
$54 / 1.08 = $50
Input
Total £120, VAT 20%
Result
Pre-tax = £100, VAT = £20
£120 / 1.20 = £100
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