1. What is Reverse Sales Tax Calculation?

Reverse sales tax calculation determines the original price before tax was added. This is useful for accounting, expense reporting, and understanding the true cost of items in Canada where tax rates vary by province.

2. How Does the Calculator Work?

The calculator uses the reverse sales tax formula:

Where:

• Total Amount — Final price including tax (CAD)
• Tax Rate — Combined GST/HST/PST rate as decimal (e.g., 0.13 for 13%)

Explanation: The formula mathematically reverses the standard tax calculation to find the original amount before taxes were added.

3. Importance of Reverse Tax Calculation

Details: Essential for businesses to determine actual product costs, for individuals tracking pre-tax expenses, and for accurate financial reporting in Canada's multi-rate tax system.

4. Using the Calculator

Tips: Enter the total amount paid in CAD and the applicable tax rate as a decimal (e.g., 0.05 for 5% GST, 0.13 for 13% HST). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are common Canadian tax rates?
A: Rates vary by province: 5% (GST only), 13% (ON HST), 15% (NS HST), etc. Quebec has GST + QST (9.975%).

Q2: Why use decimal for tax rate?
A: Mathematical formulas require rates in decimal form (15% = 0.15) for accurate calculations.

Q3: Does this work for multiple tax components?
A: Yes, use the combined rate (GST + PST/HST) as a single decimal value.

Q4: How accurate is this calculation?
A: Perfectly accurate for single items. For multiple items taxed at different rates, separate calculations are needed.

Q5: Can I use this for business accounting?
A: Yes, this is appropriate for calculating pre-tax amounts in Canadian business expenses and accounting.