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Sales Tax Backwards Calculator

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How to Calculate Sales Tax Backwards from Total Price

How to Calculate Sales Tax Backwards from Total Price

When making a purchase, the total price includes both the base price of the item and the sales tax. If you only have the final total price and need to determine how much of that is sales tax, you can calculate it backwards. This is useful if you need to separate out the tax from the total cost for accounting or reporting purposes. Below, we’ll guide you through the process of calculating sales tax backwards from a given total price.

Sales Tax Calculator

Use the calculator below to quickly calculate the sales tax based on your total price and the applicable sales tax rate.

Sales Tax: 0

Base Price (Before Tax): 0

Steps to Calculate Sales Tax Backwards

  1. Step 1: Identify the total price. This is the price you paid, which includes both the base price of the item and the sales tax.
  2. Step 2: Know the sales tax rate. This is typically expressed as a percentage, such as 8%, 10%, etc. If you're unsure of the rate, you may need to check local tax rates.
  3. Step 3: Use the formula: Sales Tax = Total Price - (Total Price ÷ (1 + Tax Rate)). This formula isolates the sales tax portion of the total price.
  4. Step 4: Apply the formula to find the sales tax and the base price (before tax). For example, if the total price is $110 and the tax rate is 10%, you can use the formula to find the sales tax amount and base price.

Example Calculation

For example, let’s say you purchased an item with a total price of $110, and the sales tax rate is 10%. To calculate the sales tax backwards:

  • Base Price = $110 ÷ (1 + 0.10) = $110 ÷ 1.10 = $100
  • Sales Tax = $110 - $100 = $10

So, the sales tax in this example is $10, and the base price (before tax) is $100.