§ 01 / ARTICLE

Reverse Sales Tax. From a Receipt.

CATEGORY NUMBERSREAD 3 MINPUBLISHED APR 21, 2026

The formula: pre-tax = total / (1 + rate). For $108 total at 8% tax, that's $108 / 1.08 = $100. Do NOT subtract 8% of $108 — that gives $99.36, which is wrong.

Why subtraction fails

The tax wasn't 8% of the total — it was 8% of the pre-tax price. 8% of $100 is $8, which is less than 8% of $108 ($8.64). Subtract the bigger number and you over-remove.

Setup: pre-tax × (1 + rate) = total. Solve for pre-tax: pre-tax = total / (1 + rate). Memorize this one equation and reverse-tax becomes trivial.

Common rates as divisors

5% tax — divide by 1.05
7% tax — divide by 1.07
8% tax — divide by 1.08
8.25% tax — divide by 1.0825
9.5% tax — divide by 1.095

When you need it

Expense reports (business reimburses pre-tax), comparing totals across items, finding the tax paid on a specific item without itemization. Any time you have the final total and need to back out the tax.

// TRY THE TOOL

REVERSE A RECEIPT.

Enter total + tax rate, get pre-tax price. Or the other way — pre-tax + rate = total + tax.

OPEN →

§ 02 / FAQ

Questions. Answered.

What’s the formula?+

Pre-tax = total / (1 + rate). For $108 total at 8% tax: $108 / 1.08 = $100. Subtracting 8% of $108 gives $99.36 — wrong, because the tax was on the $100, not the $108.

Why does subtraction give the wrong answer?+

Because 8% of $108 is bigger than 8% of $100. The tax was calculated on the pre-tax base, not the post-tax total. To reverse, you have to divide.

When do I need this?+

Expense reports, business accounting, comparing pre-tax prices, finding the tax portion on a bill. Common business ops problem.

What if I have the tax amount, not the rate?+

Pre-tax = total − tax. Simpler case; no division needed.

§ 03 / TOOLS

Related calculators.

§ 04 / READING