FinanceGlossary

GST

GST is a goods and services tax added to most sales — 10% in Australia, 15% in New Zealand — so a GST-inclusive price is the base price multiplied by 1.10 or 1.15.

Also called goods and services tax, VAT, sales tax

GST applies to most goods and services sold in Australia at 10%, and in New Zealand at 15%. A price quoted before tax is multiplied by 1.10 or 1.15 to reach the GST-inclusive figure.

Going the other way is not a subtraction of 10%. To remove GST from a total, divide by 1.10: that takes $110 back to $100 with $10 of GST inside it. Multiplying $110 by 0.9 lands on $99 — close, but a dollar wrong, and the error grows with the total.

Registered businesses claim the GST they pay on business inputs back as credits, so the tax usually passes through rather than accumulating. Many other countries run the same mechanism under the name VAT, at their own rates.

Common questions

How do I remove GST from a total?

Divide the total by 1.10 for Australian GST, or by 1.15 for New Zealand GST. Dividing $110 by 1.1 gives $100 with $10 of GST inside it.

Is GST the same as VAT?

It is the same kind of multi-stage tax on consumption. Rates and rules differ by country; the GST and VAT calculator handles the common ones.