How this is worked out
GST in Australia is a flat 10% with no state variation, which makes the arithmetic simpler than anywhere else on this site — and the common error more visible.
Adding GST multiplies by 1.1. $100 becomes $110.
Removing GST divides by 1.1. And because the rate is exactly 10%, this has the neatest shortcut of any tax anywhere: the GST is one eleventh of the GST-inclusive price.
GST = total ÷ 11
$110 ÷ 11 = $10 of GST, leaving $100. Subtracting 10% instead gives $99, which is $1 out on every hundred dollars.
This direction is the one Australians need most often, because prices displayed to consumers must already include GST — that is a legal requirement, not a convention. Every advertised price you see is the tax-inclusive one, so extracting GST is the everyday operation and adding it is the exception.
A worked example
- Price before GST
- $100.00
- GST at 10%
- $10.00
- GST-inclusive price
- $110.00
- Wrong way back (subtract 10%)
- $99.00
- Right way back (divide by 1.1)
- $100.00
- GST as a share of the total
- 1/11 (9.09%)
- Registration threshold
- $75,000
Divide by eleven
It is the tidiest rule in any tax system: at a 10% rate, the tax is exactly one eleventh of the tax-inclusive total. No decimals, no rounding, no formula to remember. $110 contains $10 of GST. $77 contains $7. $1,100 contains $100.
The reason it works is that 10% of the net equals 9.0909…% of the gross, and 9.0909…% is 1/11. Every country with a 10% consumption tax gets this shortcut; a country with 20% VAT gets 1/6, and one with 13% HST gets nothing memorable.
The error people make is subtracting 10% instead, which gives $99 from $110. It is out by 1% of the total, which is small enough to slip through a casual check and large enough to break a BAS reconciliation.
Displayed prices already include GST — by law
Australian Consumer Law requires that a price shown to a consumer be the single total price including GST. This is why an Australian shelf price is what you pay at the till, and why the American experience of tax appearing at checkout is so disorienting to visitors from here.
The practical consequence is that "add GST" is the less common operation for a consumer. What people actually need is to work backwards — for an expense claim, a tax invoice, or to check a quote that was given ex-GST.
Business-to-business quotes are the exception and the source of most confusion. A quote to another business may legitimately be shown ex-GST, and a $10,000 quote can become an $11,000 invoice. If a quote does not say which it is, ask.
What is GST-free, and what is merely input taxed
GST-free supplies carry no GST and the supplier can still claim credits for the GST on its own costs. The main categories are basic food, most medical and health services, most medicines on the PBS, education courses, childcare, water and sewerage, exports and precious metals.
Input taxed supplies also carry no GST, but the supplier cannot claim credits. Financial supplies and residential rent are the main ones. It is the same distinction as zero-rated against exempt elsewhere, under different names.
Basic food is the category with the most litigation behind it. Plain bread is GST-free; a sandwich is not. Plain milk is GST-free; a flavoured milk drink may not be. The test is roughly whether the item is a staple ingredient or a prepared product, and the boundary has been argued in court more than once.
Registration, BAS, and the $75,000 threshold
You must register for GST once your turnover reaches $75,000 in any twelve-month period — $150,000 for a non-profit. Taxi and ride-share drivers must register from the first dollar, regardless of turnover, which is a genuine exception that catches new drivers.
Once registered you charge GST on your sales, claim credits on your purchases, and remit the difference through a Business Activity Statement — quarterly for most small businesses, monthly above $20 million turnover.
Below the threshold, registering voluntarily lets you claim GST on your costs but obliges you to charge it on your sales. For a business selling to consumers that means either raising prices or absorbing 10%; for one selling to other businesses it is usually a straightforward gain, since your customers reclaim what you charge.
Assumptions and sources
- GST rate
- 10%, unchanged since introduction on 1 July 2000. No state or territory variation. checked 2026-08
- Registration threshold
- $75,000 turnover in any twelve-month period; $150,000 for non-profits; from the first dollar for taxi and ride-share drivers. checked 2026-08
- Extraction formula
- net = gross ÷ 1.1, so GST = gross ÷ 11. Verified in tools/test/payroll.mjs against a round trip.
- GST-free categories
- Basic food, most medical and health services, PBS medicines, education, childcare, water and sewerage, exports and precious metals. Whether a specific supply qualifies is a question for the ATO.