GST in Australia is calculated as 1/11th (or 10%) of the total sale price. For a $110 sale, the GST component is $10. Businesses must register for GST when their annual turnover reaches $75,000 or more ($150,000 for non-profits).
Understanding GST calculations is crucial for your financial success if you're running a business in Penrith or anywhere else in Australia. Let's break down everything you need to know about calculating GST in simple, easy-to-follow terms.
GST (Goods and Services Tax) is a 10% tax applied to most goods and services sold in Australia. It's a consumer tax, but businesses are responsible for collecting and remitting it to the ATO.
The standard formula for calculating GST is:
For example:
You must register for GST when:
To add GST to a GST-exclusive price:
To find GST in a GST-inclusive price:
For property sales:
For example:
Sale Price (inc. GST): $55
GST Amount: $55 ÷ 11 = $5
Net Amount: $60
Service Fee: $200
GST: $200 × 0.1 = $20
Total Invoice: $220
Item 1: $100
Item 2: $150
Subtotal: $250
GST: $250 × 0.1 = $25
Total: $275
When registered for GST, you must:
Don't let GST calculations overwhelm you. If you're finding it challenging to manage your GST obligations, consider working with a local accounting professional. Here at Amplify 11 in Penrith, we specialise in helping creative businesses manage their GST and other financial obligations effectively.
Only if you expect your turnover to reach $75,000 or more in your first year, or if you're providing ride-sourcing services.
Most businesses report quarterly, but some may report monthly or annually depending on their circumstances.
Basic food items, most health services, some educational courses, and certain exports are typically GST-free.
You can claim GST credits on most business purchases, but some exceptions apply, such as entertainment expenses.
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