1. What is GST Reverse Calculation?

The GST Reverse Calculator helps determine the pre-tax amount and GST amount when you know the total amount paid (including GST). This is particularly useful for businesses and individuals in Alberta where the GST rate is 5%.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Total Amount — The amount paid including GST (CAD)
• GST Rate — The applicable GST rate (5% = 0.05 in Alberta)

Explanation: The formula works by dividing the total amount by 1 plus the GST rate to isolate the pre-tax amount.

3. Importance of GST Reverse Calculation

Details: This calculation is essential for accounting purposes, expense tracking, and financial reporting where you need to separate the GST component from total payments.

4. Using the Calculator

Tips: Enter the total amount paid (including GST) in CAD and the GST rate as a decimal (0.05 for 5%). The calculator will show both the pre-tax amount and the GST amount.

5. Frequently Asked Questions (FAQ)

Q1: Why is the GST rate 0.05 in Alberta?
A: Alberta has a 5% Goods and Services Tax (GST) but no Provincial Sales Tax (PST), making the total tax rate 5%.

Q2: Can I use this for other provinces?
A: Yes, but you'll need to adjust the GST rate for provinces with HST (combined GST+PST rates vary by province).

Q3: What if I only know the GST amount?
A: The pre-tax amount would be GST amount divided by the GST rate (e.g., $5 GST / 0.05 = $100 pre-tax).

Q4: Is this calculation accurate for partial GST amounts?
A: The calculation assumes the full GST rate was applied to the entire amount. For mixed GST rates, more complex calculations are needed.

Q5: How should I round the amounts?
A: The calculator rounds to 2 decimal places (cents) as standard for financial calculations.