The Reverse Tax Formula
Original Price = Total / (1 + Tax Rate / 100)This formula works whenever tax is already included in the final amount.
Why It Works
Tax was originally added by multiplying the pre-tax amount by 1 plus the rate. To undo that, you divide the final total by the same multiplier.
Total = Original x (1 + rate)
Original = Total / (1 + rate)Examples
| Total | Rate | Formula | Original |
|---|---|---|---|
| $106.00 | 6% | $106.00 / 1.0600 | $100.00 |
| $107.50 | 7.5% | $107.50 / 1.0750 | $100.00 |
| $108.00 | 8% | $108.00 / 1.0800 | $100.00 |
| $110.25 | 10.25% | $110.25 / 1.1025 | $100.00 |
Edge Cases
Zero tax: if the rate is 0%, the original price is the same as the total.
Multiple tax components: add state and local rates together before using the formula.
Mixed-tax baskets: if only some items were taxable, you need the taxable subtotal rather than the final combined total.