GST on $2,500
Both answers, because "GST on $2,500" means two different things depending on whether that figure already includes GST.
How much GST is on $2,500?
- If $2,500 is before GST: GST is $375.00 and the total becomes $2,875.00.
- If $2,500 already includes GST: the GST portion is $326.09 and the price before GST is $2,173.91.
- Working: $2,500.00 × 1.15 = $2,875.00 · $2,500.00 ÷ 23 × 3 = $326.09
$2,500, worked both ways
| Treating $2,500 as… | GST | Ex GST | Inc GST |
|---|---|---|---|
| a price before GST | $375.00 | $2,500.00 | $2,875.00 |
| a total that includes GST | $326.09 | $2,173.91 | $2,500.00 |
| an Australian price at 10% | $250.00 | $2,500.00 | $2,750.00 |
The two NZ rows are the ones people mix up. Charging $375.00 of GST on an invoice whose total is meant to be $2,500 would leave you $48.91 short once Inland Revenue takes its cut — the GST inside $2,500 is only $326.09.
The two calculations
Adding GST to a GST-exclusive price.
Finding the GST already inside a total.
Stripping GST out to get the ex-GST price.
Taking 15% of a GST-inclusive figure is the common error — it overstates the GST every time. Full guide, with the registration rules and the $60,000 threshold →
Do the next bit too
The number is the easy part. These take it the rest of the way.
Make the invoice
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