Financial Planning4 min read•Updated 2026-09-04
GST & VAT Calculator Guide: How to Calculate Forward and Reverse Tax
Calculate net price, gross price, and tax amounts for GST, VAT, and sales tax with forward and reverse formulas.
MX
MultiToolX Technical Team
Financial Engineering
Key Takeaways
- Exclusive Tax Formula: Tax = Net Price x (Rate / 100); Gross = Net + Tax.
- Inclusive (Reverse) Tax Formula: Net = Gross / (1 + Rate / 100); Tax = Gross - Net.
- MultiToolX lets you toggle between adding tax and extracting tax in 1 click.
1. Tax Inclusive vs Tax Exclusive Explained
When a price is 'Exclusive of Tax', the tax must be added on top. When a price is 'Inclusive of Tax' (common in consumer retail receipts), the tax is already baked into the total number. To find how much tax was paid, a reverse tax calculation is required.
2. The Reverse Tax Calculation Formula
If an item costs $118 with an 18% VAT included:
- Original Net Price = $118 / (1 + 0.18) = $100.00
- VAT Amount = $118 - $100 = $18.00
Frequently Asked Questions
Why can't I just subtract 18% from $118?
Because 18% of $118 is $21.24, which would give $96.76. The tax was originally 18% of the net price ($100), not the gross total.
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