This guide covers Australian GST, which is a flat 10%. If you are elsewhere, the method below still works — swap 1.1 for 1 plus your own rate — but the rate and the exemptions will be different.
To add GST, multiply by 1.1. To find the GST already inside a price, divide by 11.
That second one is where people come unstuck, and it is worth understanding properly because it appears on every invoice you ever reconcile.
Adding GST is the easy direction
GST in Australia is a flat 10% on most goods and services. A $100 job becomes $110.
$100 × 1.1 = $110You can also work out the GST on its own — 10% of $100 is $10 — and add it. Same answer, one more step.
Taking GST out is where it goes wrong
Here is the trap. You have a GST-inclusive total of $110 and you want to know how much of it is GST.
The instinct is to take 10% off, because the rate is 10%. That gives $11. It is wrong.
The reason is that the 10% was never applied to $110. It was applied to $100. By the time you are looking at the total, you are looking at 110% of the original price — so taking 10% of the total takes 10% of a number that is already too big.
The correct move is to divide the total by 11:
$110 ÷ 11 = $10 GST
$110 − $10 = $100 before GSTDivide by 11, not by 10. It works because the total is eleven-tenths of the original, so one-eleventh of the total is exactly the GST.
Why eleven
If the original price is $100, the total is $110 — made of ten equal $10 parts of original price plus one more $10 part of GST. Eleven parts in total, one of which is the tax.
That holds at any price. A $946 invoice is eleven parts of $86, so the GST is $86 and the work was $860.
The error compounds quietly
On a single $110 invoice the difference between the right answer and the wrong one is a dollar. Trivial.
Across a year of invoicing it stops being trivial, and because the mistake is consistent it does not look like an error in your books — it just looks like slightly wrong numbers everywhere. That is exactly the kind of thing that surfaces at the worst possible moment.
The quick reference
| You have | You want | Do this |
|---|---|---|
| Price before GST | Total | × 1.1 |
| Total including GST | The GST amount | ÷ 11 |
| Total including GST | Price before GST | ÷ 1.1 |
The same method at other rates
The divide-by-11 shortcut is specific to a 10% rate. The general rule is to divide by
1 + rate, then subtract:
| Rate | Add tax | Remove tax |
|---|---|---|
| 10% (AU, NZ GST) | × 1.1 | ÷ 1.1 |
| 15% (NZ GST) | × 1.15 | ÷ 1.15 |
| 20% (UK VAT) | × 1.2 | ÷ 1.2 |
What is actually GST-free in Australia
Not everything attracts GST. The main exemptions are basic food, most medical and health services, and most education.
“Basic” is doing real work in that sentence. Plain bread is GST-free. A toasted sandwich is not. The distinction is roughly whether the food has been prepared for immediate eating, which is why supermarket receipts show GST on some lines and not others.