Forward and reverse sales tax
Sales tax is a percentage added to the price of goods and services at the point of sale. This tool handles both directions. In forward mode you start with a pre-tax price and it adds the tax to show the total you will actually pay at the register.
In reverse mode you start with a total that already includes tax — say, a receipt figure — and it works backward to separate out the original net price from the tax baked inside it. That reverse step is more than just subtracting the rate: it divides by (1 + rate), because the tax was charged on the net, not on the total.
Reading the breakdown
The three figures always add up consistently: net price plus sales tax equals the total. The pie chart shows how much of the total is the underlying price versus the tax, which is handy for seeing how a higher rate eats into a purchase.
Practical tips
A few things worth keeping in mind when using sales tax figures:
- Combined rates often stack a state rate with county and city rates, so the effective rate at the register can be higher than the headline state figure.
- Some categories — groceries, prescription drugs, clothing in certain states — may be exempt or taxed at a reduced rate.
- For expense reports or accounting, the reverse mode is the quickest way to pull the tax out of a tax-inclusive total.
A note on accuracy
This calculator does only the arithmetic for a single rate you supply; it does not know the correct rate for any particular location or product. Always confirm the applicable rate with your state or local tax authority before relying on the figures for filing or pricing.
Formula
forward: tax = price × rate; total = price + tax. reverse: net = price ÷ (1 + rate); tax = price − netFrequently asked questions
- What does "price includes tax" mean?
- It assumes the amount you entered already contains the tax, and works backwards to show the pre-tax net price and the tax inside it.