The Australian GST Formula Explained (With Examples)

> **Quick Answer:** To add GST: multiply by 1.10. To find the GST amount: multiply by 0.10. To remove GST from an inclusive price: divide by 1.10. To extract GST from an inclusive total: divide by 11. These formulas match ATO guidelines exactly.

Australian GST has been 10% since 2000. The maths sounds simple — but there are two distinct operations (adding and removing), and the rounding rules matter when you're reconciling a BAS with cents across dozens of transactions. This guide covers both formulas precisely, with worked examples.

The Two GST Formulas

Every GST calculation falls into one of two types:

**Type 1 — Adding GST to a GST-exclusive price:**

You have a net price (before tax) and need to find the GST-inclusive total.

**Type 2 — Removing GST from a GST-inclusive price:**

You have a total that already includes GST and need to extract the tax component and/or the net price.

These are the only two scenarios. Our [Australian GST calculator](/) handles both with a single dropdown selection.

Type 1: Adding GST

When a price **does not yet include GST** (common for B2B quotes, wholesale pricing, contractor fees), use:

**GST amount = price × 0.10**

**Total (incl. GST) = price × 1.10**

Worked examples

| Ex-GST price | GST (×0.10) | Total (×1.10) |

|-------------|-------------|---------------|

| $100.00 | $10.00 | $110.00 |

| $550.00 | $55.00 | $605.00 |

| $1,200.00 | $120.00 | $1,320.00 |

| $4,999.50 | $499.95 | $5,499.45 |

For $550: GST = $550 × 0.10 = **$55.00**. Total = $550 × 1.10 = **$605.00**.

The multiplier 1.10 works because you're adding 100% of the original price plus 10%: 1.00 + 0.10 = 1.10.

Type 2: Removing GST

When a price **already includes GST** (retail receipts, invoices marked "GST inclusive"), use:

**Amount (excl. GST) = inclusive price ÷ 1.10**

**GST amount = inclusive price ÷ 11**

The divide-by-11 shortcut

This is the most useful mental-maths trick for Australian business. The GST is exactly **1/11th** of any GST-inclusive price.

Why? Because when you add 10% to a base price, the base becomes 100/110 = 10/11 of the total. The GST component is the remaining 1/11.

Proof: $100 base + $10 GST = $110 total. GST as fraction of total = $10 ÷ $110 = 1/11.

Worked examples

| Incl. GST price | ÷ 11 (GST) | ÷ 1.10 (Ex-GST) |

|----------------|------------|-----------------|

| $110.00 | $10.00 | $100.00 |

| $605.00 | $55.00 | $550.00 |

| $1,320.00 | $120.00 | $1,200.00 |

| $2,200.00 | $200.00 | $2,000.00 |

For $2,200: GST = $2,200 ÷ 11 = **$200.00**. Net = $2,200 ÷ 1.10 = **$2,000.00**.

Check: $2,000 + $200 = $2,200. ✓

Rounding Rules

The ATO doesn't mandate a specific rounding approach for every transaction, but standard practice is:

- Round GST amounts to the nearest cent (two decimal places)

- Round half-cents up (standard Australian banking convention)

- Don't round intermediate calculation steps — only the final result

Where rounding matters: if you have 50 line items each with a small GST component, rounding each line item independently and then summing can produce a different total than calculating the GST on the sum of all items. Both approaches are generally acceptable, but consistency within your accounting system is important.

A rounding example

An invoice has three lines: $99.90, $45.40, $12.95 (all GST-inclusive).

**Method A — line-by-line:**

- $99.90 ÷ 11 = $9.0818... → rounds to $9.08

- $45.40 ÷ 11 = $4.1272... → rounds to $4.13

- $12.95 ÷ 11 = $1.1772... → rounds to $1.18

- Total GST: $9.08 + $4.13 + $1.18 = **$14.39**

**Method B — total first:**

- Total = $99.90 + $45.40 + $12.95 = $158.25

- $158.25 ÷ 11 = $14.3863... → rounds to **$14.39**

Same result here — they often differ by 1 cent for larger invoices. Neither is wrong; it's an artefact of rounding. Our [GST calculator](/) calculates to full precision and rounds the final result, consistent with Method B.

Why 1/11th Works — The Algebra

For those who want to understand rather than just remember the formula:

Let the GST-exclusive price = **P**.

GST rate = **10% = 0.10**.

GST amount = **P × 0.10**.

GST-inclusive price = **P + P × 0.10 = P × 1.10 = T** (total).

To recover the GST from T:

GST = T − P = T − T/1.10 = T × (1 − 1/1.10) = T × (0.10/1.10) = T × (1/11).

So GST = T/11. QED.

This is why the "divide by 11" shortcut is exact — it's not an approximation. It's the algebraic consequence of a 10% rate applied to the exclusive price.

When to Use Each Formula

**Use Type 1 (add GST)** when:

- You're writing a quote or invoice for a B2B client who will claim back the GST

- Your pricing is structured as ex-GST (common in wholesale, professional services, trade)

- You've been given an ex-GST figure to put on a tax invoice

**Use Type 2 (remove GST)** when:

- You received a GST-inclusive invoice and need to separate the tax for your records

- You're working backwards from a retail price to find the base cost

- You're completing a BAS and need the GST component of purchases to calculate credits

Both are on our [GST calculator](/) — just pick your scenario from the dropdown and enter the amount. For more practical context on how these formulas apply to invoices, read our guide on [how to write a GST invoice](/blog/how-to-invoice-with-gst-australia). To understand why input tax credits work the way they do, see our [guide to claiming GST credits](/blog/claiming-gst-input-tax-credits).