Why is the Place part of my Each Way bet not calculating correctly?

In the above example this bet would be called $25 each way. Each Way bets consist of two bets. One on the win, one on the place. In this case the place is payed at one fifth winnings out to 8 places.

The bookie will calculate this return for you, however if you are doing your own calculations you may have made the error to divide the odds by 5. This is incorrect as the winnings need to be divided by 5, which we can do by removing the stake before division and then adding it back at the end.

In this case, you can use the following formula to calculate your place odds.

( Win Odds - 1 ) / Winnings Divider + 1

( 8.5 - 1 ) / 5 + 1

= 2.5

Win - $25 X 8.5 = $212.50

Place - $25 X 2.5 = $62.50

Total - $212.50 + $62.50 = $275