Quick Answer
To add tax to a price, multiply by (1 + tax rate); to remove tax from a tax-inclusive price, divide by (1 + tax rate) to find the original pre-tax amount.
What Is GST / VAT / Tax?
Sales tax, GST (Goods and Services Tax), and VAT (Value Added Tax) are consumption taxes added to the price of goods and services, collected by sellers on behalf of the government. While the exact name and rate vary by country, and even by region within some countries, the underlying math for adding or removing tax from a price is the same everywhere.
A common point of confusion is the difference between a tax-exclusive price (the tax is added on top at checkout) and a tax-inclusive price (the displayed price already includes tax, and you need to work backward to find the pre-tax amount). Many countries, including most of the EU, the UK, and Pakistan's GST system, display tax-inclusive prices, while the US typically displays tax-exclusive prices with sales tax added at checkout.
This calculator handles both directions, adding tax to a base price, and extracting the pre-tax amount from a tax-inclusive total, which is useful for invoicing, bookkeeping, and verifying receipts.
How to Use
- 1Enter the price amount.
- 2Enter the applicable tax rate (e.g. GST, VAT, or sales tax percentage for your region).
- 3Choose whether you want to add tax to a pre-tax price, or remove tax from a tax-inclusive price.
- 4The calculator returns the tax amount and the resulting total or pre-tax price.
Formula
Total = Price × (1 + Tax Rate / 100)Original Price = Inclusive Price / (1 + Tax Rate / 100)Example: Removing 17% GST from a PKR 11,700 inclusive price
- Inclusive Price = 11,700, GST Rate = 17%
- Original Price = 11,700 / (1 + 0.17) = 11,700 / 1.17
- Original Price = 10,000
- GST amount = 11,700 − 10,000 = 1,700
Tips & Things to Know
- Never simply multiply an inclusive price by the tax percentage to find the tax amount, that calculates tax on top of an already-taxed figure, which overstates the tax portion. Always divide by (1 + rate) first.
- Tax rates can differ by product category in many countries (e.g. reduced rates for food or medicine), always confirm the applicable rate for the specific item.
- For businesses, the difference between tax-inclusive and tax-exclusive pricing affects how revenue is reported, keep this consistent across invoices and bookkeeping.
- Some regions apply multiple layered taxes (e.g. federal + provincial), in that case, check whether they compound or are calculated independently on the base price.