How to calculate GST (New Zealand)

March 23, 2014

How to Calculate GST, AM-Insider article by Sarah Ritchie

GST (Goods and Services Tax) is a New Zealand value-added tax with a current rate of 15%. End users pay this tax on all liable goods and services directly (the purchase price includes GST). GST need to be included on most goods and services that we offer within the print and advertising industry in New Zealand.

When quoting and invoicing jobs, an Account Manager needs to specify the price EXCLUDING GST, but also clearly show the GST component and the total including GST. Two main exceptions to this, where you both quote AND invoice a job without a GST component would be:

  • when you are running a political campaign (local body or government), where the candidate (or political party) is GST-exempt. 
  • when you are working on a project for a client based outside of New Zealand (e.g. exporting your goods or services).

 

To work out the GST content of a total which includes GST:

Example:
Value of goods or services including GST = $1,500

$1,500 multiplied by 3 = $4,500

$4,500 divided by 23 = $195.65 (GST content)

$1,500 minus $195.65 (GST) = $1,304.35 (value of goods or services without GST)

 

To add GST to a total:

Example:
Value of goods or services excluding GST = $560

$560 multiplied by 0.15 = $84 (GST amount)

$560 plus $84 = $644 (value of goods or services including GST)

 

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