How it works
Adding tax multiplies the pre-tax amount by 1 + rate. Removing tax runs the same relationship backwards: dividing a tax-inclusive total by 1 + rate recovers the original pre-tax amount — you can't just subtract the rate directly, because the rate applies to the smaller pre-tax figure, not the total you're holding.
adding tax: total = amount × (1 + rate ÷ 100)
removing tax: pre-tax amount = total ÷ (1 + rate ÷ 100)
Worked example
A $107.00 receipt total that already includes 7% tax.
- Divide by 1 + rate: $107.00 ÷ 1.07 = $100.00 pre-tax.
- Tax amount: $107.00 − $100.00 = $7.00.
The item was $100.00 before tax, with $7.00 of tax added to reach the $107.00 total.
Common questions
Why can't I just subtract the tax rate from a total?
Because the rate was applied to the smaller pre-tax amount, not the total. A $107 total with 7% tax isn't $107 × 0.93 — dividing by 1.07 is the correct inverse of multiplying by 1.07, and gives the right answer of $100, not $99.51.
Where do I find my actual tax rate?
In the US, combined state and local sales tax rates are published by each state's department of revenue and vary by city and county — there's no single lookup that covers everywhere. In Australia, GST is a flat 10% nationally, with no state variation.