Only GST-registered businesses charge GST, and only registered businesses claim it back. Check any supplier with the free GST status lookup.
The GST formula, both directions.
Australian GST is a flat 10%, which makes the arithmetic simple, as long as you use the right direction: Once you are registered you do this on every invoice, which is why what registration costs is worth knowing before you start.
- Adding GST: multiply the ex-GST price by 1.1. A $1,000 service becomes $1,100 including GST.
- Extracting GST (reverse GST): divide the GST-inclusive total by 11. In a $1,100 total, the GST is $100 and the ex-GST price is $1,000.
The classic mistake is taking 10% of the total when working backwards: 10% of $1,100 is $110, which is wrong. The GST was added to the smaller ex-GST number, so it's one-eleventh of the total, not one-tenth. The full explanation lives in our guide to calculating the GST portion correctly. Pricing a job is the other direction again, and the margin and markup calculator handles that one.
Worked examples.
| Ex-GST price | GST (10%) | Inc-GST total | GST inside the total (÷11) |
|---|---|---|---|
| $100.00 | $10.00 | $110.00 | $10.00 |
| $454.55 | $45.45 | $500.00 | $45.45 |
| $1,000.00 | $100.00 | $1,100.00 | $100.00 |
| $4,999.09 | $499.91 | $5,499.00 | $499.91 |
When you'd use each direction.
Add GST when quoting or invoicing: your rates are ex-GST and the customer-facing price needs the 10% on top (consumer prices must be shown GST-inclusive). Extract GST when reading receipts and totals: your bookkeeping and BAS need the GST portion out of GST-inclusive amounts you've already paid or charged, and every credit claim over $82.50 needs a valid tax invoice behind it.
Quick answers.
How do I calculate GST backwards from a total?
Divide the GST-inclusive total by 11. That's the GST inside it; the remaining ten-elevenths is the ex-GST price. For a $220 total: $220 ÷ 11 = $20 GST, $200 ex-GST.
Why divide by 11 and not take 10%?
Because the 10% was added to the smaller ex-GST price, not the final total. The total is 110% of the original, so the GST is 10/110 of it: exactly one-eleventh.
Is GST always 10% in Australia?
The rate is 10% and has been since GST began in 2000. But not everything carries it, GST-free items (like basic food and most health and education) and input-taxed items (like residential rent) have no GST in the price at all.
Should I be charging GST on my prices?
Only if you're GST-registered: compulsory from $75,000 turnover, from the first dollar for rideshare. If you're not registered, you don't charge GST and can't show GST on invoices.
Related: How to calculate GST (guide) · Tax invoice requirements · All business calculators
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