Australian GST Guide for New Zealand Businesses
🦘 What is Australian GST?
Goods and Services Tax (GST) is Australia's value-added tax of 10% applied to most goods and services. Introduced in 2000, GST is collected by businesses and remitted to the Australian Taxation Office (ATO).
GST Basics
GST Rate:
Calculating GST:
Add GST (GST-exclusive to GST-inclusive):
Remove GST (GST-inclusive to GST-exclusive):
Or use the fraction method:
Who Must Register for GST?
Mandatory Registration:
- Turnover ≥ $75,000: Must register within 21 days
- Non-profit organisations ≥ $150,000: Higher threshold
- Taxi/rideshare drivers: Register regardless of turnover
Voluntary Registration:
- Businesses below $75,000 can choose to register
- Benefits: Claim GST credits on purchases, appear more established
- Costs: Compliance burden, quarterly BAS reporting
GST-Free vs Input-Taxed vs Taxable
| Category | GST on Sales | Claim GST on Purchases | Examples |
|---|---|---|---|
| Taxable (10%) | Yes | Yes | Most goods/services |
| GST-free (0%) | No | Yes | Basic food, exports, health |
| Input-taxed | No | No | Financial services, rent |
GST-Free Items (No GST Charged)
Basic Food:
- Bread, milk, eggs, meat, fish, vegetables, fruit
- NOT restaurant meals, takeaway, confectionery, soft drinks
Healthcare:
- Medical services, hospital care, prescription medicines
- NOT elective cosmetic surgery, vitamins (unless prescribed)
Education:
- Course fees for primary, secondary, tertiary education
- NOT commercial training, hobby courses
Exports:
- Goods exported out of Australia
- Services provided to overseas recipients (with conditions)
Other GST-Free:
- International transport
- Precious metals (gold, silver, platinum for investment)
- Going concern business sales
- Farmland sales
Input-Taxed Supplies
These don't have GST, and you can't claim GST on related purchases:
- Financial supplies (lending, borrowing, credit cards)
- Residential rent (not commercial)
- Sale of existing residential property
- Some insurance products
How GST Works Through Supply Chain
Example: Manufacturing to Consumer
| Stage | Sale Price | GST Collected | GST Paid | Net GST to ATO |
|---|---|---|---|---|
| Manufacturer | $110 ($100+GST) | $10 | $0 | $10 |
| Wholesaler | $165 ($150+GST) | $15 | $10 | $5 |
| Retailer | $220 ($200+GST) | $20 | $15 | $5 |
| Consumer | Pays $220 | - | $20 | - |
| Total to ATO | $20 |
Each business only pays GST on the value they add. Consumer pays full $20 GST.
Australia: 10% rate, many food exemptions
New Zealand: 15% rate, very few exemptions (broader base, simpler)
Both are value-added taxes collected through supply chain.
Charging GST when not registered: Illegal, must be registered first
Not charging GST when required: Still owe ATO even if didn't collect
Claiming personal purchases: Only business purchases qualify
Wrong classification: Misclassifying taxable vs GST-free items
🔢 GST Calculations
Example 1: Adding GST to Prices
Retail store pricing products:
Example 2: Removing GST from Invoice
Invoice shows $550 including GST:
Or use fraction method:
Example 3: Business Activity Statement (BAS)
Quarterly BAS for small business:
Sales (GST Collected):
| Item | Amount Inc. GST | GST |
|---|---|---|
| Taxable sales | $88,000 | $8,000 |
| GST-free exports | $15,000 | $0 |
| Total GST collected | $8,000 |
Purchases (GST Paid):
| Item | Amount Inc. GST | GST Credit |
|---|---|---|
| Inventory | $33,000 | $3,000 |
| Rent (commercial) | $11,000 | $1,000 |
| Equipment | $5,500 | $500 |
| Utilities | $2,200 | $200 |
| Total GST credits | $4,700 |
BAS Calculation:
Example 4: Mixed Business (Taxable + GST-Free)
Bakery selling both:
Sales Breakdown:
| Product | Sales | GST Status | GST |
|---|---|---|---|
| Fresh bread (basic food) | $10,000 | GST-free | $0 |
| Cakes/pastries (not basic) | $8,800 inc GST | Taxable 10% | $800 |
| Coffee (prepared food) | $6,600 inc GST | Taxable 10% | $600 |
| Total GST on sales | $1,400 |
Purchases (Apportionment Needed):
Net Position:
Example 5: Import Calculations
Importing goods into Australia:
GST-registered businesses can claim the $1,050 GST back on their BAS.
Calculation Tips
Quick Mental Math:
- Add 10%: Multiply by 1.1
- Remove GST: Divide by 11 to get GST component
- Check: GST should be ~9.09% of GST-inclusive price
Common Prices:
| Ex-GST | GST | Inc-GST |
|---|---|---|
| $100 | $10 | $110 |
| $500 | $50 | $550 |
| $1,000 | $100 | $1,100 |
🌍 Real-World Australian GST Examples
Electrician starting business in Sydney
Year 1 Revenue Projection:
Typical Job:
Claiming GST Back:
E-commerce store selling to Australians
Monthly Sales:
| Sale Type | Amount | GST |
|---|---|---|
| Australian customers | $44,000 inc | $4,000 |
| Export to NZ | $8,000 | $0 (GST-free) |
| Export to USA | $5,000 | $0 (GST-free) |
BAS Summary:
Melbourne cafe with dine-in and takeaway
Weekly Sales:
| Item | Sales Inc GST | GST Status | GST |
|---|---|---|---|
| Coffee (all taxable) | $3,300 | 10% | $300 |
| Meals (dine-in taxable) | $2,200 | 10% | $200 |
| Bottled water | $550 | 10% | $50 |
| Bread (basic food) | $400 | GST-free | $0 |
| Milk (basic food) | $300 | GST-free | $0 |
| Total | $6,750 | $550 |
Key point: Coffee and restaurant meals are always taxable. Unprepared basic foods (bread, milk for takeaway) are GST-free.
Developer building new apartments
Sale of New Apartment:
Development Costs (GST Credits):
| Expense | Amount Inc GST | GST Credit |
|---|---|---|
| Construction | $440,000 | $40,000 |
| Materials | $110,000 | $10,000 |
| Professional fees | $33,000 | $3,000 |
| Land (input-taxed) | $150,000 | $0 |
| Total credits | $53,000 |
Net Position:
Note: Land is input-taxed (no GST on purchase, no credit). New residential property sales are taxable. Existing residential property sales are input-taxed.
🎯 Test Your Knowledge
Complete this quiz on Australian GST
Frequently Asked Questions
What is the Australian GST rate?
Australia's GST is 10%, compared with New Zealand's 15%.
How do I add Australian GST to a price?
Multiply the GST-exclusive price by 1.1 to add 10% GST.
How do I remove Australian GST from a total?
Divide the GST-inclusive total by 11 to find the GST amount, or by 1.1 to get the GST-exclusive price.
Is Australian GST the same as New Zealand GST?
The concept is the same, but the rate differs (10% versus 15%) and the registration thresholds and rules are different.
Related guides
- Australian Shares From NZ, a related guide in the same area.
Situations like yours. The 4 situations worked through above sit alongside 16 more about moving to or from New Zealand, each with the sums shown.