How to Take the GST Out of an Amount

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Canada's Goods and Services Tax (GST) is applied to a wide array of purchases across Canada. In many provinces it can be charged in addition to a provincial sales tax or as part of the province's Harmonized Sales Tax (HST), which includes GST and a provincial portion.

Read the sales receipt or service invoice that itemizes the amount you have paid. It should break down the listed price for the service or product, as well as an amount for any additional tax paid. On a receipt with several items, the tax paid on each item will often be listed separately.

Write the total amount on a blank piece of paper. Underneath it, write down the total amount of GST charged. Subtract the GST from the total amount and the resulting figure is the amount with the GST taken out of it. For example, if your total amount was $112, of which $5 was GST, you will be left with $107 when you take the GST out of the amount. However, this method does not necessarily show you the original price before all taxes are charged since it only removes the GST, and not provincial taxes, from the amount.

Write down the total amount you were charged if you do not have an itemized receipt and want to take out the GST. Using your personal knowledge or by using your province's financial services website, write down the percentage of provincial sales tax that would have been charged in addition to the GST. Add all taxes together so you have a total tax percentage for the purchase. For example, if your provincial tax rate is 7 percent and the GST is 5 percent, your total tax rate is 12 percent.

Divide the total amount you paid by one plus the percentage of tax that was charged. For example, if you spent $112 and the total tax rate was 12 percent, divide 112 by 1.12. The result, $100, is the amount of your original purchase with no tax. Multiply the before tax figure by the current GST rate. As of November 2010, the GST rate was 5 percent. Five percent of $100 is $5. Take this amount and subtract it from the original purchase price of $112. Your result will again be $107.

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About the Author

Catherine Lovering has written about business, tax, careers and pets since 2006. Lovering holds a B.A. (political science), LL.B. (law) and LL.L. (civil law).

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