Add GST, take it out,
or work back from the tax

Why taking 10% off gives you the wrong number

This is the mistake worth understanding, because it is the one that quietly costs money. GST is added to the price before tax, so removing it means undoing that addition — not subtracting the same percentage from the larger figure.

On the $1,100 above, the wrong method understates what you kept by $10.00.

The gap is always the GST-inclusive price divided by 110, which is the same thing as one tenth of the GST. That is why it slips through on small amounts and hurts on large ones: on a $50,000 invoice with GST included, it is $454.55.

Where the one eleventh comes from

It is not a rule of thumb. Section 9-70 of the GST Act charges GST at 10% of the value of a taxable supply, and section 9-75 defines that value as the price multiplied by 10/11. Subtract the value from the price and what is left is the price divided by eleven. The Act then works an example itself:

“You make a taxable supply by selling a car for $22,000 in the course of carrying on an enterprise. The value of the supply is $20,000. The GST on the supply is therefore $2,000.”— A New Tax System (Goods and Services Tax) Act 1999, section 9-75

Put $22,000 into the calculator above in “Remove GST” mode and it returns the same $2,000. An automated test pins that example, so if the engine ever stopped agreeing with the legislature’s own arithmetic, this site would fail to build.

GST on common amounts

Both directions, as plain figures. These are exact: GST is rounded to the nearest cent as section 9-90 requires.

Notice $100.00 in the second table: a GST-inclusive $100 contains $9.09 of GST, not $10.00. A round total is almost never a round split.

When part of a sale is GST-free

Plenty of businesses sell both kinds of thing in one transaction: a cafe with packaged groceries, a pharmacy, a bookshop with an export order. Section 9-80 of the Act deals with it by taxing the taxable proportion — GST applies to that part and not to the rest, so the effective rate on the whole sale lands somewhere below 10%.

Food is where this bites most often. A supply of food is GST-free under section 38-2, but section 38-3 pulls a lot of it back out: food eaten on the premises, hot takeaway food, anything listed in Schedule 1, and beverages that are not in Schedule 2. That is the origin of the famous edge cases — a plain bread roll against a filled one, plain milk against flavoured. This calculator does not classify your products; it takes the GST-free amount you give it and applies the Act’s proportion rule to the rest.

Do you have to charge GST at all?

Only if you are registered, and registration becomes compulsory once your GST turnover reaches $75,000 — $150,000 for a non-profit body. Below that it is your choice. Two turnover figures decide it, one looking back twelve months and one looking forward, and they do not carry equal weight.

That question gets its own page rather than a summary here, because the answer turns on your own figures. Do you need to register for GST? puts your turnover against the threshold, applies both tests the way section 188-10 actually words them, and covers the one group that has no threshold at all.

Two things follow from being registered. A business customer needs a tax invoice from you before it can claim the GST back, and the GST you collect is reported on an activity statement — the BAS calculator works out which figure belongs in each box.

Where these numbers come from

Every figure here was read from the legislation itself on the Federal Register of Legislation, not from a summary of it. The Act is the current compilation and the regulations are theirs; both are named with their compilation number and the date they came into force, and both are listed below so you can check any line of this page against the source in a couple of clicks.

The methodology page sets out how the engine handles rounding, what it deliberately does not model, and when each figure is re-checked.