How to figure out subtotal before tax and other useful formulas

Growing up, I hated math.  Would I actually use algebra in the real world or is it mere an academic exercise? Why must I spend the time to learn something I will never use once I'm out of school? 

Well, it turns out, a little bit of math is very useful to operate a small business. Here is a list of formulas we use often. All formulas can be used with a spreadsheet (Don't forget to insert "=" in front of formula if using a spreadsheet!)

How to figure out the subtotal before tax

Let's say whatever you bought was $172.50 including tax, and you want to know the price of the item before tax. The tax is 15%. 

Divide total including tax by 1.15:


The subtotal is $150.

If your tax rate is 7%, change 1.15 to 1.07 and so on. 

X is 80% of Y

You have a number, let's say 230 which is 80% of some certain number. How to figure out that missing number?

Divide 1 by 0.8 and multiply 230 by that number:


The missing number is 287.5. To check your answer, divide 230 by 287.5 which is 0.8 (=80%). Change 0.8 to 0.25 (25%) and so on depending on your situation.

How to figure out the total including tax

Let's say you are selling an item at $150 a piece. Also, your tax rate is 15%.

To calculate the total, multiply the subtotal by the tax rate plus one:


The total including 15% tax is $172.50

How to figure out the tax rate

You will need the subtotal and total including tax to calculate the tax rate.

Let's say that the subtotal is $150 and the total including tax is $172.50. 

Subtract the subtotal from the total and divide the difference by the subtotal:


The tax rate is 0.15 or 15%

Price after discount(%) given

Let's say that you are giving 20% discount to all new customers for a consulting package which usually goes for $200. 

Multiply 200 by 0.2:


The discount will be $40. 

Now Subtract 40 from 200:


$160 is the price after discount applied. 

Hope that helps:)