GST Calculator Australia

GST meaning: what the goods and services tax is

GST is a 10% tax on most goods, services and other items sold or consumed in Australia. A GST-registered business adds it to its prices, collects it from customers and pays it to the ATO, then claims back the GST included in its own business purchases as GST credits. The customer at the end of the chain carries the cost.

For a registered business, the GST in its prices is collected on the ATO's behalf. The ATO's list of what registered businesses do includes putting aside the GST you collect so you can pay it, and getting tax invoices for business purchases so you can claim the GST credits.

How to calculate GST: three formulas with worked examples

Every GST calculation is one of three operations. Which one you need depends on whether the number you start with already includes GST.

How to calculate GST from a total (reverse GST) and the 10% mistake

To work out the GST in a total, divide the total by 11, not by 10. Taking 10% off a GST-inclusive figure overstates the GST because the 10% was originally charged on the smaller, pre-GST price. On a $1,100 invoice, 10% of the total is $110.00, but the GST actually included is $100.00.

Prices that do not divide evenly produce fractions of a cent. The ATO's rule for an invoice with a single taxable item is to round GST to the nearest cent, with half a cent rounding up. A $89.95 item therefore includes $8.18 GST and is $81.77 before GST. Invoices with several items can total the GST first and then round, or round each line and total, and you and your customer do not have to use the same method.

GST-free vs input-taxed: the two kinds of sales without GST

Neither GST-free nor input-taxed sales include GST in the price. The difference is on the purchase side: a GST-free seller can still claim GST credits on the costs of making those sales, while an input-taxed seller cannot.

• Exported goods are GST-free only if they leave Australia within 60 days of the supplier receiving any payment or issuing an invoice, whichever comes first.
• A going-concern sale is GST-free only if the buyer and seller agree in writing before the sale, the buyer is registered or required to be registered for GST, everything needed to keep the business operating is supplied, the seller carries on the business until settlement, and payment is made.
• Residential rent is input-taxed: a landlord does not charge GST on rent and cannot claim GST credits on the costs of the rental.

Tax invoices: what they must show

A GST-registered business must give a tax invoice within 28 days if a customer asks for one, unless the sale was $82.50 or less including GST. According to the ATO, a tax invoice for a sale under $1,000 must let the buyer clearly identify seven things:

• that the document is intended to be a tax invoice
• the seller's identity
• the seller's ABN
• the date it was issued
• a brief description of what was sold, including quantity and price
• the GST amount, or the words "Total price includes GST" when GST is exactly one-eleventh of the total
• the extent to which each item is a taxable sale

Reporting GST on your BAS

Businesses with GST turnover under $10 million that report quarterly use Simpler BAS: you report total sales at G1, GST on sales at 1A and GST on purchases at 1B, and you pay the difference. If a quarter's sales were $66,000 including GST and business purchases were $19,800 including GST, label 1A is $6,000.00, label 1B is $1,800.00 and the amount payable is $4,200.00. If 1B is larger than 1A, you receive a GST refund.

Quarterly BAS lodgment and payment dates are 28 October (July–September), 28 February (October–December), 28 April (January–March) and 28 July (April–June), moving to the next business day if the date falls on a weekend or public holiday.

When a business must register for GST

You must register within 21 days once your GST turnover reaches $75,000 ($150,000 for non-profit bodies). GST turnover is gross business income, not profit, tested two ways each month: the current month plus the previous 11, and the current month plus the next 11. Taxi and ride-sourcing drivers must register regardless of turnover. The ATO warns that if you should have registered and did not, you may have to pay GST on sales made since the date you were required to register, even if you never charged it.