Taking GST out is a division by eleven.
Adding GST is a multiplication: $1,000 plus 10% is $1,100. Taking it back out is
not a subtraction of 10%, because the 10% was worked out on the smaller figure.
The GST inside $1,100
is 1,100 ÷ 11, or $100, leaving
$1,000
before GST.
Subtract 10% instead and you get $990 and a GST figure of $110 — a price that
never existed and a GST amount you did not collect. On a wholly taxable sale the
GST is always exactly one eleventh of the total.
One eleventh is the ATO's own test: a tax invoice may state that the total
includes GST where the GST is exactly one-eleventh of it. Per the ATO's tax invoices guidance.
There are two permitted ways to show the GST.
A tax invoice may show the GST amount separately, or —
where the GST is exactly one eleventh of the total — carry a statement such as “Total price includes GST”. Both are
permitted. Showing it separately is one of two forms, not the only one, and an
invoice is not defective for using the other.
A sale of $1,000 or more must also carry the buyer's identity or ABN, and itemise
the GST per line. Below $1,000 a single GST total is enough.
Per the ATO's tax invoices guidance.
Over $82.50, the buyer can require a tax invoice.
For a taxable sale of more than $82.50 including GST, you have
to issue a tax invoice when the buyer asks for one. A document that leaves out any
of the required elements — the words “tax invoice”, your identity, your ABN, the
date, what was sold, and the GST — may not work as one. That is not automatic: the
ATO can still treat a document as a tax invoice where the missing detail is clearly
ascertainable from other documents you issued. Do not lean on that. Issue a
complete one.
Per the ATO's tax invoices guidance.
GST-free is not the same as outside GST.
A GST-free sale — an export, most food, most medical — carries no GST, and this
calculator has nothing to do on one. That is not the same as the sale being
outside the system. It still goes on your BAS, you can still claim input tax
credits on what you spent to make it, and it still counts toward the $75,000 registration threshold.
That last one costs people money. A contractor billing only overseas clients
charges nobody any GST all year and can still be legally required to register —
and the ATO can then ask for GST on sales going back to the date registration was
required, out of their own pocket. The threshold is a registration trigger, not a
tax-free allowance.
Per the ATO's guidance on registering for GST.
This page reports arithmetic.
What is the GST on $1,100
is a question it can answer;
should you register for GST
is tax advice, and there is no registered tax agent behind Bilby.
The longer questions — whether an overseas client is GST-free, what counts toward
the threshold — are worked through in the
guides
, with the ruling or the section named beside each claim.