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DRcleaning
Level 1
posted
‎July 13, 2022 05:49 PM
last updated ‎July 13, 2022 12:49 AM

GST rounding 2cents

Is there any reason why GST is not calculated correctly?

On my invoices always come up with an extra 1 cent. I read that it is a long time "issue" and the only way to fix it is to manually adjust the GST with the correct value on the invoice.

Isn't this suppose to be one of the reason businesses are using accounting software?

I would never figured it out myself as I was taking for granted that an accounting software would automatically and correctly apply a 10% GST on a invoice. But a client point that to me as she was tired to adjust every time her MYOB rate in order to fit my "incorrect" invoice.

If I have to "adjust" or calculate anything myself to have a correct value I could use an excel spreadsheet without spending any money for a subscription.

 

Sorry for the rant but I think this is a very weird and unacceptable issue for a software that suppose to help you managing your business.

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1 Comment 1
IntuitSheila
Level 8
‎July 13, 2022 06:20 PM

GST rounding 2cents

Hello DRcleaning,

 

QuickBooks Online can only round off your GST Total amount to its nearest dollar and up to 2 decimals. Rest assured this is within Australian business in GST calculations and rounding.

 

As per ATO guidance, accounting software must take one of two approaches to calculate GST. The first method is called the “Total invoice rule” and the second method is called the “Taxable supply rule” - QBO follows the “Taxable supply rule.” This rule means that QBO calculates the total using a method where the tax amounts on each line of a transaction are rounded (up or down depending on the number) and then the rounded tax amounts are added to arrive at the total number.


In a nutshell, this rounding-off calculation should not be an issue at all, as our system is definitely in line with the tax table that the ATO has. On the other hand, if you would really want to get the exact GST Amount, which is already the rounded-off amount and/or for any of your future transactions, you can always do that by adjusting it manually in the Total GST box from that certain transaction inside QuickBooks Online and the Total amount of the transactions will then be adjusted automatically as expected. 

 

Please refer to this article from Intuit Developer on how they are being calculated: https://help.developer.intuit.com/s/article/QBO-APIs-Tax-Rounding-off-logic-in-QuickBooks-Online
 

Hope this answers your questions. Feel free to reach out again if you have any other questions. 

 

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