The sums
| You have | You want | Do this | Example |
|---|---|---|---|
| A price before GST | The price with GST | × 1.1 | $200 × 1.1 = $220 |
| A price before GST | Just the GST | × 0.1 | $200 × 0.1 = $20 |
| A total with GST | The GST inside it | ÷ 11 | $220 ÷ 11 = $20 |
| A total with GST | The price before GST | ÷ 1.1 | $220 ÷ 1.1 = $200 |
GST calculator
- Before GST
- GST at 10%
- Including GST
Why dividing by 10 costs you
GST is added to the price before GST, so the total is the price plus a tenth of it. Divide that total by 10 and you get a tenth of the total, which is more than the GST in it. On a $1,100 invoice that's $110 instead of $100. Across a year with $110,000 of GST-inclusive sales, it's $11,000 reported as GST instead of $10,000: a thousand dollars paid to the ATO that you didn't owe.
Rounding
GST is rounded to the nearest cent, with half a cent rounding up. On an invoice with several taxable lines, the ATO accepts two ways:
- On the total: add up the unrounded GST for each line, then round once. When every line is taxable, you can simply work out 10% of the total before GST.
- Line by line: work out and round the GST for each line, then add the rounded amounts.
Pick one and use it consistently. You and your customer don't have to use the same rule, so a cent's difference between your records and theirs isn't a problem.
Mixed invoices
GST applies to the taxable lines only. If an invoice mixes taxable and GST-free items, work the GST out on the taxable lines, and show which lines include GST. The shortcut "Total price includes GST" only works when every line is taxable, because only then is the GST exactly one-eleventh of the total. Tax invoice vs invoice has the full rules, and GST-free items on an invoice has a worked example.
Worked example
Mara's invoice to a café: a logo at $1,800 and business card design at $400, both before GST.
| Amount | |
|---|---|
| Logo design | $1,800.00 |
| Business card design | $400.00 |
| Subtotal | $2,200.00 |
| GST 10% | $220.00 |
| Total | $2,420.00 |
Check it backwards: $2,420.00 ÷ 11 = $220.00 of GST.
GST in your prices
Quoting households? Work out your price before GST, multiply by 1.1, and quote the total: a $95 hourly rate before GST is $104.50 including GST. Prefer a round $105? Work backwards: $105 ÷ 11 is $9.55 of GST, leaving you $95.45. Quotes and GST explains why households should see the GST-inclusive price.
On your BAS
GST on your sales is the GST on your invoices, added up. GST credits on your purchases are one-eleventh of each GST-inclusive business purchase, as long as you hold a tax invoice for anything over $82.50. The difference is what you pay the ATO, or what it refunds you.