1. What is the Reverse HST Calculator?

The Reverse HST Calculator calculates the pre-tax amount from a total amount that includes Ontario HST (13% as per CRA guidelines). This is useful for accounting, expense tracking, and financial reporting.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( \text{Total Amount} \) — The amount including HST (CAD)
• \( \text{Tax Rate} \) — Ontario HST rate (0.13 for 13%)

Explanation: The formula reverses the standard HST calculation to determine the original amount before tax was added.

3. Importance of Reverse HST Calculation

Details: This calculation is essential for businesses to determine actual expenses before tax, for accurate bookkeeping, and for preparing financial statements.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Why use 0.13 as the tax rate?
A: 0.13 represents Ontario's 13% Harmonized Sales Tax (HST) which combines the federal GST (5%) and provincial PST (8%).

Q2: Is this calculation CRA-approved?
A: Yes, this is the standard method recommended by the Canada Revenue Agency for determining pre-tax amounts.

Q3: Can I use this for other provinces?
A: Yes, simply adjust the tax rate to match your province's HST or GST/PST rates.

Q4: How accurate is this calculation?
A: The calculation is mathematically precise, though amounts should be rounded to 2 decimal places for currency.

Q5: Should this be used for tax reporting?
A: While this provides accurate calculations, always consult with an accountant for official tax reporting.