What is the formula to remove sales tax?

To find the price before tax, divide the Total Price by (1 + Tax Rate). For example, if Total is $108 and tax is 8%, calculate 108 / 1.08 = $100.

Why do I need a reverse tax calculator?

It is essential for freelancers and businesses who receive a gross payment and need to separate the revenue from the sales tax they owe to the government.

Can I use this for VAT?

Yes. The math for removing VAT is identical to removing sales tax. Just enter the VAT rate (e.g., 20%) in the tax rate field.

Reverse Sales Tax Calculator | Remove Tax from Total Price | Finmato

Work Backwards from the Total

Sometimes you know the final price, but you lost the receipt breakdown. Or perhaps you are a freelancer who just got paid a flat $500 and need to calculate how much of that is your actual income versus tax. Our Reverse Sales Tax Calculator solves this instantly. By working backward, it separates the government's share from your share.

What is Reverse Tax Calculation?

Reverse tax calculation is the process of extracting the tax component from a gross sum. It answers the question: "If I paid $110 total, and tax is 10%, what was the price before tax?"

Many people mistakenly subtract the percentage (e.g., $110 minus 10% = $99), but this is incorrect. The correct math requires division, not subtraction.

The Reverse Tax Formula

If you don't have this tool handy, remember this formula:

Pre-Tax Price = Total Price / (1 + (Tax Rate / 100))

Example: To remove 20% VAT from £120:
120 / 1.20 = 100.

Accounting

Bookkeepers use this constantly to break down credit card statement charges (which only show totals) into "Expense" and "Sales Tax Paid" line items.

Reimbursements

Your company might reimburse expenses but not the tax (or vice versa). Quickly find the allowable subtotal to submit for your expense report.

Tourism Refunds

Traveling to Europe? Calculate the VAT refund you are entitled to claim at the airport based on your total shopping receipts.

Frequently Asked Questions

Why can't I just subtract the percent?

Because the tax was calculated on the smaller original number, not the larger final number. 10% of $100 is $10. But 10% of $110 is $11. Taking $11 off leaves you with $99, which is wrong. You need to get back to exactly $100.

Does this work for tips?

Yes! If you paid $60 for dinner including a 20% tip, you can find the menu price by dividing $60 / 1.20 = $50.

What is "Net" vs "Gross"?

Net Price is the amount before tax. Gross Price is the amount after tax. This calculator converts Gross to Net.

Accuracy Disclaimer

Calculations adhere to standard mathematical formulas. Rounding differences of 1 cent may occur due to half-cent tax rules in some states.

Data Privacy

We do not store your data. This calculator runs entirely in your browser.

Reverse Sales Tax Calculator