How to Calculate Inclusive Tax

If a rate is inclusive of tax, to work out the net transaction amount (amount without tax) and the tax amount, you will need to make the following calculation.

(Gross amount / 1.(Tax amount without a decimal point)) = Amount without tax

Gross amount - (Gross Amount / 1.(Tax amount without a decimal point)) = Tax amount

Example: If the tax percent is 5.875%, and the gross amount is 100, then the calculation is as follows:

(100 / 1.05875) = Amount without tax

100 - (100 / 1.05875) = Tax amount

Example Calculations:

If the tax percent is 5.875%, and the gross amount is 100, then the calculation is as follows:

(100 / 1.05875) = 94.45 (net amount)

Then:

100 (gross amount) - 94.45 (net amount) = 5.55 (tax amount)

Example: If the tax percent is 20%, and the gross amount is 100, then the calculation is as follows:

(100 / 1.2) = 83.33

100 (gross amount) - 83.33 (net amount) = 16.67 (tax amount)

Example: If the tax percent is 14.5%, and the gross amount is 100, then the calculation is as follows:

(100 / 1.145) = 87.34

100 (gross amount) - 87.34 (net amount) = 12.66 (tax amount)

Room Rate: $124

Base Amount: $104.98 (calculated by considering the following 4 inclusive taxes added in the charge code 160 - Room Charge - Tax Inclusive)

4 Inclusive Taxes:

Tax 1 Charge Code: 820 (amount $2), inclusive tax = $2
Tax 2 Charge Code: 810 (5.875%), inclusive tax = 5.875% of $104.98 = $6.17
Tax 3 Charge Code: 800 (8.875%), inclusive tax = 8.875% of $104.98 = $9.32
Tax 4 Charge Code: 830 ($1.5), inclusive tax = $1.5

Based on the above, a total of $18.99 will be displayed as FEES in the deposit balance.