What Is GST?
The Goods and Services Tax (GST) is a broad-based 10% tax on most goods, services, and other items sold or consumed in Australia. It was introduced on 1 July 2000 and is administered by the Australian Taxation Office (ATO).
If your business has an annual turnover of $75,000 or more (or $150,000 for not-for-profits), you must register for GST. Once registered, you charge GST on your sales and can claim GST credits on your business purchases.
The GST Rate in Australia
Australia has a flat 10% GST rate. Unlike some countries with multiple VAT tiers, our system is straightforward — it's either 10% or GST-free. There's no reduced rate.
This simplicity makes calculations easy once you know the formulas.
How to Add GST (Calculate GST-Inclusive Price)
When you have a price excluding GST and need to work out the GST-inclusive amount:
Formula
GST Amount = Price x 0.10
GST-Inclusive Price = Price x 1.10
Examples
| Ex-GST Price | GST Amount | GST-Inclusive Price |
|---|---|---|
| $100.00 | $10.00 | $110.00 |
| $250.00 | $25.00 | $275.00 |
| $1,500.00 | $150.00 | $1,650.00 |
| $4,200.00 | $420.00 | $4,620.00 |
Real-World Example
You're a plumber quoting $850 for a hot water system installation (ex-GST):
- GST: $850 x 0.10 = $85.00
- Total invoice: $850 + $85 = $935.00
Your invoice should show both the ex-GST amount and the GST component.
How to Remove GST (Calculate GST-Exclusive Price)
When you have a GST-inclusive price and need to work out the ex-GST amount:
Formula
GST Amount = GST-Inclusive Price / 11
Ex-GST Price = GST-Inclusive Price / 1.10
The "divide by 11" shortcut is the quickest way to extract the GST component from any inclusive price.
Examples
| GST-Inclusive Price | GST Amount | Ex-GST Price |
|---|---|---|
| $110.00 | $10.00 | $100.00 |
| $55.00 | $5.00 | $50.00 |
| $330.00 | $30.00 | $300.00 |
| $2,750.00 | $250.00 | $2,500.00 |
Real-World Example
You bought office supplies for $88.00 including GST:
- GST component: $88.00 / 11 = $8.00
- Ex-GST price: $88.00 - $8.00 = $80.00
You can claim the $8.00 as a GST credit on your next BAS.
Quick Reference: GST Formulas
| Task | Formula | Example ($500 ex-GST) |
|---|---|---|
| Add GST | Price x 1.10 | $500 x 1.10 = $550 |
| Find GST amount (from ex-GST) | Price x 0.10 | $500 x 0.10 = $50 |
| Remove GST | Inclusive price / 1.10 | $550 / 1.10 = $500 |
| Find GST amount (from inclusive) | Inclusive price / 11 | $550 / 11 = $50 |
What Items Are GST-Free?
Not everything in Australia attracts GST. The following categories are GST-free:
Food
- Most basic foods (fresh fruit, vegetables, meat, bread, milk, eggs)
- Not GST-free: prepared meals, restaurant food, snack foods, confectionery, soft drinks
Health
- Most medical and health services
- Prescription medicines
- Private health insurance
Education
- Course fees for accredited courses
- Related educational materials
Financial Services
- Bank fees, insurance premiums, and share trading (input-taxed, technically different from GST-free but no GST is charged)
Exports
- Goods and services exported from Australia
Other
- Residential rent
- Sales of existing residential premises (new builds are taxable)
- Precious metals (gold, silver, platinum)
- Water and sewerage services by government
Common GST Scenarios for Small Businesses
Scenario 1: Mixed Invoices
You're a landscaper and your quote includes:
- Labour: $1,200 (GST applies)
- Plants from a nursery (on-sold): $400 (GST applies)
- Council permit fee you paid on behalf of client: $150 (may be GST-free if it's a reimbursement)
GST on taxable items: ($1,200 + $400) x 0.10 = $160.00 Total invoice: $1,200 + $400 + $150 + $160 = $1,910.00
Scenario 2: You're Not Registered for GST
If your turnover is under $75,000 and you're not registered, you:
- Do not charge GST on your sales
- Cannot claim GST credits on your purchases
- Do not need to lodge a BAS
Your invoices should not show a GST amount. Use "No ABN withholding" rules if applicable.
Scenario 3: Claiming GST Credits
You bought a new work ute for $55,000 (inc. GST):
- GST paid: $55,000 / 11 = $5,000
- You claim the $5,000 as a GST credit on your BAS
- Net cost to your business: $50,000
This only works if the purchase is for business use. If it's 70% business and 30% personal, you can only claim 70% of the GST credit ($3,500).
Tips for Getting GST Right
1. Always Show GST on Tax Invoices
For sales of $82.50 or more (inc. GST), your tax invoice must show:
- The words "Tax Invoice"
- Your ABN
- Date of issue
- Description of items
- GST amount for each item (or a statement that the total includes GST)
- Total price including GST
2. Keep Records for 5 Years
The ATO requires you to keep all invoices, receipts, and GST-related records for at least five years. Digital records are fine — just make sure they're backed up.
3. Reconcile Regularly
Don't wait until BAS time to check your numbers. Reconcile your accounts weekly or fortnightly so errors are caught early.
4. Use Software That Handles GST Automatically
Manually calculating GST on every invoice and expense is tedious and error-prone. Good invoicing software handles this automatically.
How OneBookPlus Handles GST
OneBookPlus calculates GST automatically on every invoice and expense you create. You choose whether a line item is GST-inclusive, GST-exclusive, or GST-free, and the platform does the maths for you.
Features that make GST simple:
- Automatic 10% GST calculation on all invoices and quotes
- GST-free line items for exempt goods and services
- GST summary reports for BAS preparation
- ABN auto-display on all tax invoices
- Expense categorisation with GST tracking
No more fumbling with a calculator or second-guessing your BAS figures.
Start Calculating GST the Easy Way
Stop doing GST maths on the back of a napkin. OneBookPlus gives you automatic GST calculations, professional tax invoices, and BAS-ready reports — all on the free plan. Sign up at onebookplus.com.au and let the software handle the numbers.