GST Calculator

How GST is calculated

GST is a broad-based tax of 10% on most goods, services and other things sold or consumed in Australia (ATO, How GST works). Registered businesses collect it on their taxable sales, claim back the GST inside their business purchases, and send the difference to the ATO on a Business Activity Statement. There are only three sums, and they run in two directions:

• Adding GST — GST-inclusive price = price × 1.1
• The GST inside an inclusive price — GST = inclusive price ÷ 11
• The pre-GST price — inclusive price × 10 ÷ 11

The divide-by-11 is the one that trips people up. Ten per cent of a GST-inclusive total is not the GST inside it — it's 10% of a number that already has GST in it, so it overshoots by exactly one tenth, every single time.

Worked example — a $2,860 invoice with GST already in it

A landscaper is paid $2,860 for a job and wants to know how much of that was never really theirs. Enter 2,860 above and choose Remove GST. The calculator returns a pre-GST amount of $2,600.00, a GST component of $260.00, and shows the GST-inclusive figure entered as $2,860. The sum behind it is $2,860 ÷ 11 = $260.

Do it the intuitive way instead — 10% of $2,860 — and you get $286. That's $26 too much on one job, and if that habit runs across a whole quarter it's a real over-payment sitting in someone else's account. Going the other direction is simpler: enter 1,000 with Add GST and you get a GST-inclusive price of $1,100 with $100 of GST — 10% of a GST-exclusive figure genuinely is 10%.

When registering for GST becomes compulsory

Registration stops being a choice at a fixed line. You must register once your GST turnover — gross income from all your business activities, less any GST — reaches $75,000, or $150,000 for a non-profit organisation. Taxi, limousine and ride-sourcing drivers register from their very first dollar, whatever their turnover (ATO, Registering for GST).

There are two turnover figures, and the ATO expects you to check them monthly:

• Current GST turnover — this month plus the previous 11.
• Projected GST turnover — this month plus the next 11.

Reach the threshold on either one and you have 21 days to register. There is a sensible release valve: if your current turnover is over the line but your projected turnover is genuinely under it — one unusually large job, or a business winding down — you don't have to register.

Below the threshold, registering is voluntary and it cuts both ways. You get to claim GST credits on your purchases, but you add 10% to your prices. If you sell mostly to other GST-registered businesses, that 10% is invisible to them because they claim it straight back. If you sell to households, it comes out of your margin or off your competitiveness. It's worth modelling both before opting in — and once you are registered, the quarterly rhythm begins, which the BAS and GST set-aside calculator turns into a weekly number you can actually bank.

GST-free vs input-taxed — and why the difference matters

Both phrases mean "no GST on the sale", which is why they get used interchangeably. Only one of them lets you keep claiming the GST on everything you bought to make that sale, and that difference lands in your bank account rather than in a footnote.

In practice: a bakery selling plain bread makes a GST-free sale, charges no GST, and still claims back the GST on its oven, its flour deliveries and its power bill. A landlord renting out a residential flat makes an input-taxed sale, charges no GST on the rent, and wears the GST on repairs, agent fees and insurance as a permanent cost. Identical invoices, very different bottom line.

Anything that isn't GST-free or input-taxed is a taxable sale, and that covers most of what a small business does — goods, general trade labour, professional services, freight. If you're registered, GST goes on it.

What you can claim, and what you can't

A GST credit (formally an input tax credit) refunds the GST buried inside a business purchase. To claim one you have to be registered, the price has to have genuinely included GST, you have to have paid or be liable to pay it, and for anything over $82.50 including GST you need a valid tax invoice before you lodge (ATO, When you can claim a GST credit). Your supplier has 28 days to provide one once you ask.

The everyday costs that carry no claim, because there was no GST in them to begin with:

• Wages and superannuation — neither has GST on it.
• Bank fees, interest and most financial supplies — input-taxed.
• Purchases from suppliers who aren't registered — they can't legally charge GST, so there's nothing to claim. ABN Lookup settles it in about ten seconds.
• Basic food and other GST-free buys.
• Government charges such as stamp duty, council rates and most licence fees.

And the ones where GST was charged but the credit is reduced or denied outright (ATO, When you cannot claim a GST credit):

• Anything part-private — apportion it. A laptop used 70% for the business gives you 70% of the GST.
• Purchases made to produce input-taxed sales — the residential-rent trap above.
• Entertainment that isn't deductible for income tax.
• The part of a car's price above the car limit — the credit is capped at one eleventh of that year's car limit.

One piece of good news for anyone reconstructing a messy year: there's a four-year limit on claiming GST credits, so a credit you missed isn't gone the moment the BAS is lodged. And if the purchase is a capital asset, note that the two systems don't overlap — the instant asset write-off calculator works on the GST-exclusive cost when you're registered, because the GST comes back through your BAS rather than your tax return.

Cash or accruals — and how this reaches your BAS

Your accounting method decides when a sale hits your activity statement, not how much GST it carries (ATO, Choosing an accounting method):

• Cash basis — GST is counted in the period the money actually moves. Available to businesses with an aggregated turnover under $10 million, and much kinder on cash flow: you never remit GST on an invoice that hasn't been paid yet.
• Non-cash (accruals) — GST is counted when you issue the tax invoice or receive payment, whichever comes first. Compulsory for most larger businesses, and a truer picture of what you owe and what you're owed.

Then there's how often you report, which is a separate question with its own thresholds:

Annual reporting is narrower than most people assume — it is not a small-business concession, it's only open to businesses that registered voluntarily while sitting under the $75,000 threshold. Lodging quarterly online generally buys you an extra two weeks on those dates.

Whichever cycle you land on, the final arithmetic is the same: GST on your sales (label 1A) minus GST credits on your purchases (1B) gives the net GST you pay or get refunded. The BAS calculator assembles that from raw sales and purchase figures, and the rest of the business calculator suite covers payroll tax, FBT and contractor rates once GST is under control.

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