Adding & Removing GST โ The Two Formulas
Both directions come down to simple math, but people mix them up constantly:
- Adding GST โ multiply the pre-GST price by 1.10 (or by 0.10 and add that to the original)
- Removing GST โ divide the GST-inclusive total by 1.10 to find the pre-GST price
A common mistake: taking 10% off a GST-inclusive total instead of dividing by 1.10 โ this under-calculates the pre-GST price, since 10% of the total isn't the same as the GST component of that total.
BAS Estimate โ For Business Owners
If you're GST-registered, your quarterly (or monthly) Business Activity Statement nets off GST you collected on sales against GST you paid on business purchases (input tax credits). This calculator's BAS Estimate mode does that calculation for you from two simple totals.
Worked Example
| Item | Amount |
|---|---|
| Total sales, incl. GST | $55,000 |
| GST collected (1/11th of sales) | $5,000 |
| Total purchases, incl. GST | $22,000 |
| GST credits (1/11th of purchases) | $2,000 |
| Net GST payable to ATO | $3,000 |
If your GST credits exceed GST collected โ common for businesses with large capital purchases in a given period โ you'd be due a refund instead of owing a payment.
GST-Free Items โ Not the Same as GST-Exempt
Most basic food, many health and medical services, most education, and some childcare are GST-free. This is a specific legal category: a GST-free sale still lets the business claim input tax credits on related purchases, unlike a true "input-taxed" supply (like most financial services or residential rent), where no GST is charged and no credits can be claimed on related costs.
Registration Threshold
You must register for GST once your turnover reaches or is expected to reach $75,000/year ($150,000 for non-profit organisations). Below that, registration is optional โ some small businesses register voluntarily anyway to claim input tax credits on setup costs.
Related Tools
Frequently Asked Questions
The BAS Estimate mode assumes all sales/purchases entered were fully GST-inclusive at the standard rate โ actual BAS calculations may involve GST-free sales, input-taxed supplies, and adjustments not captured by this simplified estimate. Use accounting software or a BAS agent for your actual lodgment.