GST Calculator (Add Sales Tax)
Reverse GST Calculator (Subtract Sales Tax)
Definition – What is the GST?
The GST, or Goods and Services Tax, is a value-added tax on purchases.
As a value-added tax, only the final consumer pays the GST – purchases by business at other stages of production do not pay GST (they are charged GST, however, those charges act as a credit against the GST they charge).
GST is not charged on exports, but it is charged on some imports.
New Zealand’s current GST rate is 15%.
Historic rate changes have been: 1986 (introduction of GST) – 10%. Increase in 1989 to 12.5% and an increase in 2010 t0 15%.
What goods and services are not charged GST?
Inland Revenue keeps a record of goods and services not charged GST.
Popular (but not all) categories are:
- Financial Services
- Renting a Residential Dwelling
- Fine Metals
Formula – How to calculate GST
GST is calculated by multiplying the GST rate (15% in New Zealand) by the total pre-tax cost. The cost of GST is then added to the purchase.
Example: $75 of goods x 15% GST = $11.25 GST
$75 of goods + $11.25 GST = $86.25 total
Formula – How to calculate reverse GST
To find the GST from a total, divide the total amount by the GST rate divided by 100 and plus 1.
Example: $70 total (with GST) at 15% GST rate
(15% / 100) + 1 = 0.15 + 1 = 1.15
$70 / 1.15 = $60.87 cost before GST
GST refunds (tourism & business)
Unlike other countries, there is no tourism refund for GST. The tax applies to all purchases within New Zealand.