Removing tax is not the same as subtracting it
Adding tax is easy. Taking it back out is where the errors happen, because the percentage was never calculated from the total you are holding.
A receipt shows $108.25 including 8.25% tax. Subtracting 8.25% from $108.25 gives $99.32 — wrong by 68 cents. The tax was 8.25% of the $100 price, not of the $108.25 total. The correct operation is division: 108.25 ÷ 1.0825 = exactly $100.
The error grows with the rate. On a £120 total at 20% VAT, subtracting gives £96 when the true net is £100 — an understatement of over 3% of the total. Across a year of expense claims that is a meaningful sum reported incorrectly.
Which mode to use
Pick a mode, enter your numbers, and the breakdown appears instantly. In “add tax” mode, enter the pre-tax price and the rate to get the tax and the final total. In “remove tax” mode, enter a tax-inclusive total and the rate to recover the original price and the tax portion.
Why the reverse calculation trips people up
Adding tax is straightforward, but going the other way is where mistakes happen. A common error is subtracting the tax percentage directly from the total — but the percentage was never taken from the total, it was taken from the smaller pre-tax price. The correct method is to divide the total by one plus the rate. This tool handles that automatically, which makes it useful for expense reports, VAT extraction, and checking receipts.
Getting the rate right
The accuracy of the result depends entirely on the rate you enter. In many places the headline rate is actually a combination of state, county, and city taxes, so use the total combined rate for your location rather than a single component. Everything is calculated in your browser and nothing you enter is stored or sent anywhere.
Getting the rate right
The accuracy of everything here depends on the rate you enter, and in many places the headline figure is a combination. A US sales tax rate can stack state, county, city, and special-district portions into a single number that differs street by street. Use the combined rate for the exact location of the sale, and remember that some categories — groceries, medicine, children's clothing — are often taxed differently or exempt.