GST Calculator Australia

How To Calculate GST?

Step 1: Determine if GST applies to your product or service

The first step in calculating GST is to determine if your product or service is taxable. Most goods and services are taxable, but some are exempt or zero-rated.

Examples of exempt items include basic food, certain medical services, and certain educational courses. Zero-rated items include exports and some basic food items.

If your product or service is exempt or zero-rated, you do not need to charge GST.

Step 2: Determine the GST-inclusive or GST-exclusive Price

The next step is to determine whether the price of the product or service includes GST or excludes it. If the price is GST-inclusive, you will need to reverse calculate the GST component.

For example, if the price of a product is $110, and you know that GST is 10%, you would divide the price by 11 (110 ÷ 1.1 = 100) to determine the GST-exclusive price, which is $100.

If the price is GST-exclusive, you will need to add the GST component to the price.

Step 3: Calculate the GST Component

Once you have determined the GST-inclusive or GST-exclusive price, you can calculate the GST component.

To calculate GST, simply multiply the price by the current GST rate of 10%. For example, if the GST-exclusive price is $100, the GST component would be $10 (100 × 0.1 = 10).

Step 4: Determine the Total Price

To determine the total price, you need to add the GST component to the GST-inclusive price or add it to the GST-exclusive price, depending on which you used in step 2.

For example, if the GST-inclusive price of a product is $110, the GST component is $10, and the total price would be $120 ($110 + $10).

Step 5: Record the GST component

As a business owner, you will need to record the GST component separately from the total price.

This is because you will need to pay the GST component to the Australian Taxation Office (ATO) on a regular basis.

Step 6: Lodge & Pay BAS

Business Activity Statements (BAS) are used to report and pay your GST to the ATO. BAS are usually lodged either monthly, quarterly, or annually depending on your business turnover.

You will need to report the GST component as well as other taxes and credits on your BAS. The ATO will then calculate the amount of GST you need to pay or the refund you are entitled to.

Conclusion

Calculating GST in Australia is a necessary process that all business owners must undertake.

By following these six steps, including the GST Calculator, you can calculate the GST component accurately, ensuring that you are charging and paying the correct amount of tax.

It is essential to keep accurate records of your GST transactions and to lodge your BAS on time to avoid penalties from the ATO.

If you are unsure about any aspect of GST, you should seek professional advice from an accountant or tax agent.