How it's calculated
New Zealand GST is charged at 15% on most goods and services sold by GST-registered businesses, and on most imported goods.Inland Revenue
- Adding GST. Multiply the price before GST by 15% to get the GST, then add it on.
- Removing GST. If a price already includes GST, multiply it by 3 and divide by 23 to find the GST inside it, then subtract that to get the price before GST. Inland Revenue calls 3/23 the tax fraction and says this method always gives an accurate answer.Inland Revenue
The formula
- Add GST: GST = price × 0.15; price including GST = price + GST.
- Remove GST: GST = price including GST × 3 ÷ 23; price excluding GST = price including GST − GST.
3/23 works because a GST-inclusive price is 115% of the original, and 15 ÷ 115 = 3 ÷ 23. Dividing the GST-inclusive price by 1.15 gives the same price excluding GST. Amounts are rounded to the nearest cent.
Worked example
Inland Revenue's own example: headphones at $100 before GST carry $15.00 of GST, for $115.00 including GST.Inland Revenue
| Line | Amount |
|---|---|
| Price excluding GST | $100.00 |
| GST (15% of the price) | $15.00 |
| Price including GST | $115.00 |
Going the other way, the GST inside a $115 price is $15.00, and inside a $100 GST-inclusive price it is $13.04, leaving $86.96.
| Line | Amount |
|---|---|
| Price excluding GST | $86.96 |
| GST (3/23 of the price) | $13.04 |
| Price including GST | $100.00 |
Assumptions and limitations
- Standard-rated supplies only. Exports and some other supplies are zero-rated (0%), and some are exempt from GST, such as residential rent and many financial services.
- Registration. You must register for GST if your turnover was over, or is expected to go over, $60,000 in 12 months. Below that, registering is optional.
- Your GST return is worked out on your total sales and purchases for the period, with adjustments; this calculator works on a single amount.
For tax on company profits, see the NZ company tax calculator.