GST calculator NZ

Goods and Services Tax is charged at 15% on most goods and services supplied in New Zealand. To go from a GST-exclusive price to the price a customer pays, multiply by 1.15, or work out 15% and add it on. A quote of $1,000 plus GST comes to $1,150.00, of which $150.00 is GST.

Prices advertised to the public are normally shown GST-inclusive, so "plus GST" prices are mostly business-to-business: trade quotes, contractor invoices and wholesale price lists. If you are self-employed and registered, the GST you charge is not your income; it is held for IRD and paid with your GST return.

When a price already includes GST, the GST is not 15% of that price. It is 15 parts in every 115, which simplifies to 3/23. Inland Revenue's own example: $100 including GST contains $13.04 of GST. On a $1,150 receipt, the GST is $150.00 and the price before GST is $1,000.00.

A common mistake is to take 15% of the inclusive figure. On $500 that gives $75.00, when the GST is actually $65.22. The difference adds up quickly across a year of business expenses you claim back in your GST return.

Not everything carries GST at 15%. Exported goods, and the sale of a business as a going concern between two registered persons, are zero-rated: GST applies at 0%, so the seller can still claim GST on costs. Residential rent, interest, bank fees and most other financial services are exempt, so no GST is charged and none can be claimed on related costs. A landlord cannot claim GST on rates, insurance or repairs for a rental house for that reason.

You must register once your turnover from a taxable activity reaches $60,000 in a 12-month period, looking back or ahead. Below that, registering is optional, but you cannot add GST to your prices unless you are registered. Registered businesses file returns monthly, two-monthly or six-monthly, depending on turnover and choice.

A registered sole trader on two-monthly returns invoices $34,500 including GST in the period and spends $9,200 including GST on business costs. The GST in the sales is $4,500.00 (3/23 of $34,500), and the GST in the costs is $1,200.00. The return nets one against the other, so $3,300.00 goes to IRD. If costs had been higher than sales, for example in a period spent setting up, IRD would refund the difference.

GST is separate from income tax. The sole trader's income is the GST-exclusive figure, $30,000.00 less $8,000.00 of costs, and income tax is worked out on that profit. The income tax calculator shows the tax on a year's income, and the PAYE calculator covers wages.

A tradie's invoice for $2,875.00 including GST carries $375.00 of GST, so the work itself cost $2,500.00. A $49.99 item from a shop includes $6.52 of GST. If a client gives you a budget of $15,000 including GST, the most you can quote before GST is $13,043.48.

Rounding can move the total by a cent. Three items at $9.99 each have $1.30 of GST per line, which adds to $3.90, but working out GST on the $29.97 total gives $3.91. Small differences like this are normal; accounting software may work GST out per line or on the invoice total.