Goods and services tax (GST) is added to the price of most things sold in New Zealand. If you run a business, you need to know how to add it to a price, how to work out the GST inside a price that already includes it, and when you have to register. If you’re a buyer, it helps to know whether a quote is “plus GST” or “including GST”.
This guide covers all three, with examples worked out by the GST calculator. GST is not tied to the income tax year: the rate below applies throughout 2026.
The GST rate
GST is charged at 15% on most goods and services supplied in New Zealand, on most goods imported into New Zealand and on some imported services.Inland Revenue
There are two important exceptions:
- Zero-rated supplies are taxable, but GST is charged at a rate of zero. The main examples are exported goods and certain exported services, and the sale of a business as a going concern between two registered businesses. The business still includes them in its GST return and can still claim GST on its costs.Inland Revenue
- Exempt supplies have no GST at all, and the supplier can’t claim GST on the costs of making them. Examples are rent paid on a private home, and financial services such as interest on loans and bank fees.Inland Revenue
So the rent on the home you live in and your mortgage payments don’t include GST, but most things you buy in a shop, from a tradesperson or online from a registered overseas seller do.
Adding GST to a price
To add GST to a price that doesn’t include it, multiply the price by 15% and add the result.Inland Revenue
| Price excluding GST | GST | Price including GST |
|---|---|---|
| $100 | $15.00 | $115.00 |
| $250 | $37.50 | $287.50 |
| $1,000 | $150.00 | $1,150.00 |
| $4,500 | $675.00 | $5,175.00 |
| $20,000 | $3,000.00 | $23,000.00 |
Quotes and invoices between businesses are often written “plus GST”, because a registered business can claim the GST back. Prices for consumers are normally shown including GST, since that’s what you actually pay. If you start from a GST-inclusive total instead, don’t use this method: use the one in the next section.
Taking GST out of a price: the 3/23 fraction
If a price already includes GST, you can’t just take 15% of it. That rate applies to the price before GST, not the total. Instead, Inland Revenue uses the tax fraction: multiply the GST-inclusive price by 3, then divide by 23. The result is the GST; take it away from the price to get the amount before GST.Inland Revenue
| Price including GST | GST in the price | Price excluding GST |
|---|---|---|
| $115 | $15.00 | $100.00 |
| $100 | $13.04 | $86.96 |
| $500 | $65.22 | $434.78 |
| $1,150 | $150.00 | $1,000.00 |
| $69,000 | $9,000.00 | $60,000.00 |
The fraction comes from the rate itself. A GST-inclusive price is the original price with 15% added, so the GST is the rate divided by one plus the rate, as a share of the total. That fraction simplifies to 3 parts in 23. Inland Revenue’s guide says the fraction method always gives an accurate answer.
The difference matters. Taking the rate straight off a $115 price would give $17.25, which is too much; the real GST in that price is $15.00.
“Plus GST” or “including GST”?
The same number on a quote can mean two different prices, so check the wording. A quote of $1,150 including GST means you pay $1,150, of which $150.00 is GST. A quote of $1,150 plus GST means you pay $1,322.50. If a quote doesn’t say, ask before you accept it. For a business that is registered for GST the difference is mostly cash flow, because it claims the GST back; for a household or an unregistered business, the GST is a real cost.
Two worked examples
A tradesperson’s quote. A builder quotes $2,400 plus GST for a job. Adding GST gives the amount the customer pays:
| Line | Amount |
|---|---|
| Price excluding GST | $2,400.00 |
| GST (15% of the price) | $360.00 |
| Price including GST | $2,760.00 |
The builder keeps $2,400.00 as income and passes the $360.00 of GST to Inland Revenue, less any GST they can claim on their own costs.
A shop receipt. A registered business buys equipment for $3,450 including GST. To claim the GST, it needs the GST part of the price:
| Line | Amount |
|---|---|
| Price excluding GST | $3,000.00 |
| GST (3/23 of the price) | $450.00 |
| Price including GST | $3,450.00 |
The business can claim $450.00 in its GST return, as long as it holds the taxable supply information for the purchase and uses the equipment for its business.
When you must register for GST
You must register for GST if your turnover from a taxable activity was over $60,000 in the last 12 months, or is expected to go over $60,000 in the next 12 months. Turnover means your sales from the activity, not your profit, and the test looks back and forward from any point in time, not at the tax year.Inland Revenue When you register, Inland Revenue confirms your GST number, your accounting basis and how often you file returns.Inland Revenue
A “taxable activity” is one you carry on continuously or regularly, supplying goods or services to other people for payment. Selling private property, such as a car or home not used for business, is not part of one, and no GST is charged on it.Inland Revenue
You can register voluntarily even if your turnover is lower. That lets you claim GST on your business costs, which can help if you have large start-up costs or sell mainly to other GST-registered businesses. But you then have to charge GST on your sales and file returns, so for a small business selling to the public it can mean higher prices or a smaller margin.Inland Revenue
What a GST return adds up
A registered business files GST returns monthly, two-monthly or six-monthly. Which of these you can use depends on your turnover, and you can always choose monthly.Inland Revenue Each return compares two totals for the period:
- output tax, the GST included in your sales;
- input tax, the GST included in your business purchases and expenses.
If output tax is larger, you pay the difference to Inland Revenue. If input tax is larger, for example in a period with a big equipment purchase, you get a refund.Inland Revenue On a payments basis you count sales and purchases when money changes hands; on an invoice basis, when invoices are issued or received.
Each total is worked out with the tax fraction. If your GST-inclusive sales for a period were $46,000, the output tax is $6,000.00. If your GST-inclusive costs were $11,500, the input tax is $1,500.00, and you pay the difference between the two.
GST on things you buy from overseas
GST also applies to goods you buy from overseas. Since 1 December 2019, GST has been charged on low-value goods bought from overseas suppliers, usually added at the checkout by sellers registered under the low-value imported goods rules.Inland Revenue On higher-value imports, Customs collects GST when the goods arrive. A registered business can claim that GST back if it uses the goods to make taxable supplies.Inland Revenue
Common mistakes
- Taking the rate off an inclusive price. As above, use the tax fraction for any price that already includes GST.
- Claiming GST on private use. You can only claim GST to the extent something is used for your taxable activity. A phone or vehicle used partly for private purposes needs an adjustment.
- Claiming GST from unregistered suppliers. If a supplier isn’t registered, there’s no GST in the price to claim, except for some special supplies such as second-hand goods.
- Forgetting to register. Once your turnover goes over the threshold, you need to register even if your profit is small. Keep an eye on your sales for the last 12 months as well as the year ahead.
- Charging GST before registering. Only registered businesses can charge GST. Until you’re registered, your prices shouldn’t include it.
Work out GST
Choose whether to add GST to a price or take it out of a GST-inclusive one, then enter the amount.
$115.00
- GST
- $15.00
- Price excluding GST
- $100.00
- GST = price × 15%. Inland Revenue: multiply the GST-exclusive amount by 0.15.
- Businesses must register for GST when turnover is over, or expected to go over, $60,000 in 12 months. Some supplies are zero-rated (0%) or exempt.
Price including GST: $115.00 $100.00 + $15.00 GST
Show the breakdown
| Line | Amount |
|---|---|
| Price excluding GST | $100.00 |
| GST (15% of the price) | $15.00 |
| Price including GST | $115.00 |
If you run a company, the NZ company tax calculator shows tax at the company rate on your profit, and NZ company tax and imputation explains how dividends are taxed. Self-employed people pay income tax on their profit at the individual rates in NZ tax brackets 2026–27.
