Reverse GST & VAT calculator
The formula, a worked example, and the error this particular calculation tends to produce.
How it works
You have a tax-inclusive total and need the amount before tax — off a receipt, a supplier invoice, or a marketplace payout that quoted one figure including tax.
The formula
tax = total × rate ÷ (100 + rate) net = total − tax
- Pick the country, or type the rate from the invoice.
- Choose "Remove tax" and enter the tax-inclusive total.
- Read the amount before tax and the tax contained in the total.
Worked example
| Item | Value |
|---|---|
| Total including tax | ₹1,180.00 |
| rate | 18% |
| Tax | ₹180.00 |
| Before tax | ₹1,000.00 |
The mistake to avoid
Multiplying the total by the rate. That computes tax on an amount which already includes tax, so it overstates the tax by the rate again — 21.24 instead of 18.00 on a total of 118 at 18%. The division is the only correct form.
Questions people ask
What is the difference between margin and markup?
Markup is profit as a share of cost; margin is profit as a share of the selling price. Cost 100 with a 50% markup sells at 150; cost 100 at a 50% margin sells at 200. They agree only at zero, and the gap widens as the percentage rises — at a 70% target the difference is more than double.
Should I apply my margin before or after tax?
Before. Consumption tax is collected on behalf of the government and was never your revenue, so the margin belongs on the tax-exclusive price. Taking the margin on the tax-inclusive figure understates your real margin and underprices the item.