ToolnozaReverse tax formula
Net price = tax-inclusive total ÷ (1 + tax rate ÷ 100). Included tax = total − net price. Divide by 1.20 for a total with 20% tax; do not simply subtract 20% of the gross total.
Worked example: total of 120 at 20%
Net = 120 ÷ 1.20 = 100. Tax included = 120 − 100 = 20. The tax is 20% of the pre-tax price (100), but 16.67% of the tax-inclusive total (120).
Why subtracting the rate from the total is wrong
Tax is applied to the pre-tax amount. If you subtract 20% of 120, you get 96, which is not the original net price. The reverse formula accounts for the tax being a fraction of the net amount.
Check the applicable tax rules
The calculator assumes one rate applied to the full pre-tax amount. Real invoices may include multiple rates, exemptions, deposits, discounts or jurisdiction-specific rounding. Confirm whether the entered rate is VAT, GST or sales tax and follow local invoice rules.
Frequently asked questions
How do I remove 10% tax from 110? 110 ÷ 1.10 = 100 net and 10 tax. Is 20% of a tax-inclusive total the included tax? No; at a 20% rate, included tax is 20/120 of gross. Does the calculator file or report tax? No, it only estimates the split.