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Tax changes - Budget 2010
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Calculating GST

For the 12.5% rate, the GST component of a GST-inclusive amount can be calculated by dividing by 9.

For the 15% rate, the GST component will need to be calculated by either multiplying the GST-inclusive amount by the fraction 3/23.Instead of using the 3/23 fraction you can also divide the GST-inclusive amount by 7.66 recurring to calculate the GST component.

Multiplying by the fraction 3/23

The fraction method is calculated using the following formula:

Rate of tax = 15% = 15% = 3
100 + rate of tax 100 + 15 115 23

To find out the GST component of a GST-exclusive amount, multiply the GST-exclusive amount by 15%.

Value of goods $1,500.00
GST at 15% $225.00
Total price $1,725.00

To calculate the GST component of a GST-inclusive amount, multiply the GST-inclusive figure by 3, then divide by 23.

Using the example above:

Step 1: $1,725.00 multiplied by 3 is $5,175
Step 2: $5,175 divided by 23 is $225.00 ( the amount of GST).


You can also calculate the GST component by dividing the GST-inclusive price by 7.66666666. However you must use at least 8 decimal places to calculate the correct GST component as using fewer decimal places can result in an incorrect answer.

Using the fraction method (multiply by 3 and then dividing by 23) will always provide you with an accurate answer.


Date published: 16 Aug 2010

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