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.
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Pro Tip
The common mistake: dividing by (1 - tax rate) instead of (1 + tax rate). If the total is $108 with 8% tax: wrong = $108 / 0.92 = $117.39, correct = $108 / 1.08 = $100.
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Did You Know?
Many businesses and accountants use reverse tax calculations daily. For receipts that only show a total, the pre-tax amount is needed for accounting — tax is expensed separately from the purchase price.
References
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