1. What is GST/HST Reverse Calculation?

The GST/HST reverse calculation determines the pre-tax amount when you know the total amount including tax. This is useful for accounting, expense reporting, and financial analysis where you need to separate the tax component from a total amount.

2. How Does the Calculator Work?

The calculator uses the reverse tax formula:

Where:

• \( \text{Total Amount} \) — The amount including GST/HST (CAD)
• \( \text{HST Rate} \) — The applicable tax rate (e.g., 0.13 for 13% HST)

Explanation: The formula works by dividing the total amount by 1 plus the tax rate to isolate the original amount before tax.

3. Importance of Reverse Calculation

Details: Reverse GST/HST calculations are essential for accurate bookkeeping, expense tracking, and financial reporting. They help businesses properly account for tax amounts when only the total is known.

4. Using the Calculator

Tips: Enter the total amount in Canadian dollars and the HST rate as a decimal (e.g., 0.13 for 13%). The calculator will show both the pre-tax amount and the tax amount.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between GST and HST?
A: GST (Goods and Services Tax) is a 5% federal tax. HST (Harmonized Sales Tax) combines GST with provincial sales tax and varies by province (13-15%).

Q2: When would I need to reverse calculate GST/HST?
A: Common scenarios include processing expense reports, analyzing receipts, or when you only have the total amount paid including tax.

Q3: How do I determine the correct tax rate?
A: The rate depends on the province where the purchase was made. Common rates are 5% (GST only), 13% (ON), 15% (NS, NB, NL, PEI).

Q4: Does this work for Quebec Sales Tax (QST)?
A: Yes, but you must use the combined GST+QST rate (e.g., 14.975% in Quebec).

Q5: Can I use this for PST calculations?
A: No, provincial sales taxes (PST) in BC, Manitoba, and Saskatchewan are calculated differently and not included in this calculator.