Need help choosing a plan?
Created with Sketch. 1800 917 771 Schedule a call
Need help?
We're here for you.
Schedule call
Created with Sketch.
GST Australia: What is it and how to calculate it

GST Australia: What is it and how to calculate it

What is GST? 

Goods and Services Tax (GST) is a value-added tax applied to the purchase price of certain goods or services.

GST applies to most products or services a business sells for domestic consumption. There are more than 160 countries that have, to date, implemented GST in some form or another since 1954. GST is also referred to as Value-Added Tax (VAT) in some countries. 

In Australia, GST is prevalent for both small businesses and larger corporations that have an income of more than $75,000 per annum as registered with the Australian Taxation Office at the end of the financial year. The GST calculation in Australia is simple as the Australia GST rate is a set of 10%.

How GST Works

GST Australia aims to unify and simplify several types of tax (such as sales tax, excise duty tax, service tax) with state-level taxes (e.g., transfer tax, luxury tax, entertainment tax) and collect them as one single tax – GST.

Businesses add GST to the final selling price of their product. The customer who purchases the product pays the selling price inclusive of GST. The GST is then collected by the business and passed on to the government.

For calculating GST in Australia, let’s take the example of a GST rate of 10%. A business charging $100 for their services would add an additional 10% ($10) so that the total amount charged to the customer is $110. The additional $10 is the GST value that has been passed on to the customer and will ultimately be paid to the government by the business that provided the services.

If a business is registered for GST, they need to start claiming GST inclusive on their tax returns, payroll and tax invoice systems for products consumed in Australia, as well as GST inclusive services and other items. 

How to calculate GST

To calculate the total amount of GST on items sold or consumed, you can follow any of the two easy processes we have put below. 

1. Adding GST

To add GST to an existing product or service, you need to multiply the amount by 10% (0.1).

For example,

Price, excluding GST: $200

x 0.1 =

GST: $20

Total including GST: $220

2. Subtracting GST

If you want to find out the pre-GST price of an item or service, divide by 1.1 (110%)

For example,

Price, including GST: $220

/ 1.1 =

Price, excluding GST: $200

(GST amount = $20)

Grow Your Business with QuickBooks

What’s the difference between GST & VAT?

In many ways, GST and VAT are simply two words for the same tax. You can think of VAT as a type of Goods and Services Tax, and GST, as a type of Value Added Tax, but they essentially mean the same thing.

What items are exempt from GST?

Some goods and services may be exempt from GST. Depending on where you do business, some examples would be: the sale and lease of residential property, donated goods sold by non-profits, financial services, or some medical and healthcare products and services.

You should never charge GST on goods or services that are exempt from it.

How to Manage GST with QuickBooks

If you’re managing GST for your business, it’s best to have all of your tax information in one place. Whatever your business size or industry, QuickBooks’ GST tracking software helps busy business owners keep track of GST before tax season rolls around.

QuickBooks’ Tax tracking software lets small businesses track and report GST. 

QuickBooks also allows you to add and edit tax rates, so you can use it in any country.

QuickBooks is pre-filled with local GST tax rates in the following countries: Argentina, Bahamas, Bahrain, Barbados, Cambodia, Colombia, Costa Rica, Dominican Republic, Ecuador, Haiti, Indonesia, Israel, Jamaica, Kenya, Nigeria, Panama, Saudi Arabia, Suriname, Thailand, Trinidad And Tobago, Uganda, Venezuela. Whenever it’s time to create a new invoice or expenses, QuickBooks automatically calculates GST for you

And when the end of your financial reporting period rolls in, QuickBooks automatically creates an up-to-date, accurate statement of your activity to help make filing your tax returns as easy as possible.

Easily organise your expenses into GST tax categories and track your GST on your business’s income and expenses. Businesses can even use their smartphones to take photos of receipts and match them to expenses to stay organised and ready for tax season.

QuickBooks’ reports allow you to create a tax summary that you can review at your leisure and before you file your end-of-period taxes. Access up-to-date financial reports, including balance sheets, cash flow statements, and profit and loss statements, and even create your own customised report. Every business is different, so customise your reports to see the data that matters most to you.

You can include GST in your Single Touch Payroll system with Quickbooks. Click on the link to learn how to track your GST and electronically lodge BAS directly from your QuickBooks account.

Frequently Asked Questions

Related Articles

Looking for something else?

Get QuickBooks

Smart features made for your business. We've got you covered.

Help Me Choose

Use our product selector to find the best accounting software for you.

QuickBooks Support

Get help with QuickBooks. Find articles, video tutorials, and more.

Stay up-to-date with the latest small business insights and trends!

Sign up for our quarterly newsletter and receive educational and interesting content straight to your inbox.

Want more? Visit our tools and templates!

By signing up you are agreeing to our terms and privacy policy.

A person is smiling and holding a laptop.