How to Calculate GST in Australia — Simple Guide With Examples

GST calculations trip up more Australian business owners than almost anything else. The maths is simple once you know the right formula — but many people use the wrong method and end up with incorrect invoices.

This guide gives you the exact formulas with real examples so you always get it right.

What is GST in Australia?

GST stands for Goods and Services Tax. It is a 10% tax applied to most goods and services sold in Australia. Businesses registered for GST collect this tax from customers and send it to the ATO, usually quarterly through a Business Activity Statement (BAS).

The Two GST Calculations You Need to Know

There are only two GST calculations you will ever need: adding GST to a price (when you are setting prices), and finding the GST inside a price that already includes GST (when checking a receipt or invoice).

Calculation 1 — Adding GST to a Price

Use this when you know your price before GST and need to find the total to charge your customer.

The formula: Price × 1.1 = GST-inclusive price

Examples:

$100 × 1.1 = $110.00 (GST is $10)

$500 × 1.1 = $550.00 (GST is $50)

$1,250 × 1.1 = $1,375.00 (GST is $125)

$85 × 1.1 = $93.50 (GST is $8.50)

Why multiply by 1.1 and not just add 10%? They give the same result. Multiplying by 1.1 is faster. Adding 10% means calculating $100 × 10% = $10, then $100 + $10 = $110. Multiplying by 1.1 does it in one step.

Calculation 2 — Finding GST Inside a GST-Inclusive Price

Use this when you have a total price that already includes GST and need to find out how much of that total is GST.

The formula: GST-inclusive price ÷ 11 = GST amount

Examples:

$110 ÷ 11 = $10.00 (GST component)

$550 ÷ 11 = $50.00 (GST component)

$1,375 ÷ 11 = $125.00 (GST component)

$93.50 ÷ 11 = $8.50 (GST component)

Why divide by 11 and not by 10? This is where most people make mistakes. If the total is $110 and you divide by 10, you get $11 — but the GST is actually $10, not $11.

The reason: GST is 10% of the original price, not 10% of the total price. Dividing by 11 gives you the correct GST component inside any GST-inclusive price.

How to Show GST Correctly on an Invoice

On every tax invoice, show three separate lines:

Subtotal (excluding GST): $500.00

GST (10%): $50.00

Total (including GST): $550.00

Never just write "Total: $550 inc. GST" without breaking out the GST separately. Your clients need the GST amount clearly shown to claim their GST credits from the ATO.

Common GST Calculation Mistakes

Mistake 1 — Calculating 10% of the wrong number. Wrong: Total is $550. GST = $550 × 10% = $55. Right: Original price is $500. GST = $500 × 10% = $50. Or use the correct formula: $550 ÷ 11 = $50.

Mistake 2 — Charging GST when not registered. If your turnover is under $75,000 and you have not registered for GST, you cannot charge GST. Charging GST without being registered is illegal.

Mistake 3 — Forgetting GST on some items. If you sell multiple items on one invoice, GST applies to each taxable item individually. Some items may be GST-free — fresh food, for example. Apply GST only to the taxable items.

Mistake 4 — Using 11% instead of 10%. GST is 10%. Some people confuse themselves. The formula multiplies by 1.1 (which adds 10%) — not 1.11.

Quick Reference GST Table

Price before GST — GST (10%) — Total including GST

$50 — $5.00 — $55.00

$100 — $10.00 — $110.00

$200 — $20.00 — $220.00

$500 — $50.00 — $550.00

$1,000 — $100.00 — $1,100.00

$2,000 — $200.00 — $2,200.00

$5,000 — $500.00 — $5,500.00

GST and Your Business Activity Statement

Every quarter, GST-registered businesses complete a Business Activity Statement (BAS) and send it to the ATO. On your BAS, you report GST collected (the total GST you charged customers), GST credits (the GST you paid on business purchases), and net GST (the difference, which you either pay to the ATO or receive as a refund).

Keeping your invoices organised makes completing your BAS much easier. Save every tax invoice you issue and every receipt for business purchases.

This article is for general information purposes only. For advice specific to your tax situation, consult a registered tax agent or accountant.