Not to confuse the issue, but, I was told it was from the backing plate to the inside lip of the rim where rubber meets the rim. The rim width is from inside the mounting lip to lip, A "7 IN" WIDE RIM, is measured from inside the lip to inside the lip. A "7in" wide rim (or any width) is not measured from the overall outside phyical width of the rim. So backspacing is the distance from the back of the mounting centre to the inside of the lip.
Just as it is with the mounting diametre, a 16in rim is measured at the mounting surface not the overall diametre inculing the lip.
So Yes, put as straight edge on the rim edge, measure from there to the back of the wheel centre, and minus off the thickness of the rim lip.
Just what I was told.
EDIT,,,, Chris. Having said that, I do believe the Standard KJ steelies are infact 5.75, the 16'' alloys are 5.5 and I remember Stu saying something about the 17'' limited alloys being 5.25...
So having said that, if there was a KJ model with a BS of 5.25 that came out of the factory that may also give you a wider standard track to work with for your little problem.