1. What is Reverse PST and GST Calculation?

Reverse PST and GST calculation is the process of determining the original pre-tax amount when you only know the total amount including taxes. This is useful for accounting, expense tracking, and financial analysis.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Total Amount — The final amount including all taxes (CAD)
• GST Rate — The Goods and Services Tax rate (as decimal)
• PST Rate — The Provincial Sales Tax rate (as decimal)

Explanation: The formula works by dividing the total amount by 1 plus the sum of all tax rates to find the original amount before taxes were applied.

3. Importance of Reverse Tax Calculation

Details: Reverse tax calculation is essential for businesses to determine their actual revenue before taxes, for accurate bookkeeping, and for understanding the true cost of goods and services.

4. Using the Calculator

Tips: Enter the total amount in CAD, the GST rate as a decimal (e.g., 0.05 for 5%), and the PST rate as a decimal. All values must be valid (amount > 0, rates between 0-1).

5. Frequently Asked Questions (FAQ)

Q1: Why would I need to calculate the pre-tax amount?
A: It helps in financial analysis, expense reporting, and understanding the true cost of purchases before taxes.

Q2: What are typical GST and PST rates in Canada?
A: GST is typically 5% (0.05), while PST varies by province (e.g., 7% in BC, 9.975% in Quebec).

Q3: Can this calculator be used for HST?
A: For HST, simply combine the GST and PST rates into a single HST rate in either field and set the other to 0.

Q4: What if I only have one tax?
A: Set the rate for the tax you don't have to 0 (zero) in the calculator.

Q5: How accurate is this calculation?
A: It's mathematically precise for the given rates, but always verify with your accounting standards.