How GST Is Calculated
GST (Goods and Services Tax) in Australia is 10% and in New Zealand is 15%. It works the same way as VAT — applied on top of the base price. The most common calculations are adding GST to a net price (to get the total customers pay) and extracting the GST from a GST-inclusive price (to separate out the tax component for accounting).
The 1/11th Rule (Australia)
A quick way to find the 10% GST included in a GST-inclusive price: divide by 11. On a $110 total, $110 ÷ 11 = $10 GST, $100 net. This shortcut works because GST is 10% of the net price, which equals 10/110 = 1/11 of the gross price.
The 3/23 Rule (New Zealand)
For NZ's 15% GST, the equivalent shortcut is to multiply the GST-inclusive price by 3/23. On NZ$115 total: $115 × 3/23 = $15 GST, $100 net.
GST-Free vs GST-Exempt in Australia
GST-free means the supply has a 0% GST rate but the business can still claim GST credits on inputs (e.g., fresh food, medical services). GST-exempt means the supply is outside the GST system entirely — no GST is charged and no credits can be claimed (e.g., financial services). This distinction matters for businesses calculating GST entitlements.
Frequently Asked Questions
What is the GST rate in Australia?
Australia's Goods and Services Tax (GST) is a flat 10% tax applied to most goods and services. Some items are GST-free (also called zero-rated): basic food, medical services, education, exports and certain others. The GST was introduced in 2000 and replaced a range of existing sales taxes.
What is the GST rate in New Zealand?
New Zealand's GST rate is 15% and has been since 2010 (it was 12.5% before that). Unlike Australia, New Zealand's GST is very broad — almost all goods and services are subject to GST with very few exemptions. Financial services and residential rent are the main GST-exempt categories.
How do I add 10% GST to a price?
Multiply the GST-exclusive (net) price by 1.10. For example, A$200 × 1.10 = A$220. The GST amount is A$20. Alternatively, multiply the net price by 0.10 to find just the GST component: A$200 × 0.10 = A$20 GST.
How do I find the GST component in a GST-inclusive price?
To extract GST from a GST-inclusive price, divide by 11 (for 10% GST) or multiply by 3/23 (for 15% GST in NZ). For example, A$220 ÷ 11 = A$20 GST. The net price is A$220 − A$20 = A$200. This works because if GST is 10% of net, it is 10/110 = 1/11 of the gross price.
Do I need to register for GST?
In Australia, businesses with annual turnover of A$75,000 or more (or A$150,000 for non-profit organisations) must register for GST. In New Zealand, registration is required once turnover exceeds NZ$60,000 per year. Once registered, you charge GST on sales and claim GST credits on business purchases, filing regular GST returns with the tax authority.