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# How do you calculate a price before tax?

Updated: 9/24/2023

Wiki User

9y ago

Usually the tax is added to the original price, so you can write an equation such as (assuming a 5% tax):

p2 = p1 + 0.05 p1

(where p1 is the price before the tax, and p2 is the price after the tax). This can be simplified (applying basic algebra) to:

p2 = 1.05 p1

Solving for the original price:

p1 = p2 / 1.05

In other words: divide the price after tax by 1.05. If the tax is any other percentage, adjust the factor; for example, for a 7% tax divide by 1.07, for an 8.5% tax divide by 1.085, etc. Note that the factor by which you divide is simply 1 + (tax rate) / 100.

Wiki User

9y ago

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Q: How do you calculate a price before tax?
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Related questions

### If you sold an item for 20.00 and included sales tax and your sales tax rate is 7.3 what was the item price before sales tax?

The easiest way to understand the answer is to turn it around. If you wanted to calculate the item price plus tax, you would multiply the item price by 1.073. So, to back up to the item price from the item price plus tax, divide the item price plus tax by 1.073. \$20.00 / 1.073 = item price before sales tax.

### How do you calculate a price before sales tax?

Usually prices are straight forward in locations with no tax. After knowing the price you then calculate the tax. However, if you know the price of the item after tax you can simply subtract the percentage of sales tax. Example: The final price of a sticker cost \$2.06. The sales tax is 7%. \$2.06 - 0.07 = \$1.99 The original price of the sticker was \$1.99 *FYI to convert percent to decimal start at the percent sign then move two decimal places to the left &lt;&lt;&lt;&lt;&lt;.

### Use the word tax in a sentence?

When purchasing a car, it is wise to calculate the tax before you decide on a price you can afford.

### How do you remove vat?

If the question is how to calculate a price before V.A.T. then for example if tax is 20% and price including tax is 8.40 then divide by 1.2 So 8.40 / 1.2 = 7.00 Or if tax is 15% then divide by 1.15 and so on ...

### How do you calculate a 7 percent sales tax?

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### Do the prices of the things in Canada have to do with the tax?

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### How do you add tax to a price?

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### Why must you first calculate a discount price on an item before calculating the total sales tax on the item?

The discount must be calculated first to get the base price of the item, then the tax percentage would be taken into consideration, otherwise you would be charging additional tax on an item which should be discounted in the first place. If you were to calculate tax first then the discount price, your total would be incorrect.

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The total tax is \$4.95 and the price before tax was \$38.04.

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The total tax is \$2.83 and the price before tax was \$47.17.

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multiply the before-tax price by 1+the tax/100 (assuming the tax is in percent)if the price is 50, and the tax on the sale is 10%after tax price: 50 x 1.1 = 55