GST (Goods and Services Tax)
Australian Business & ComplianceAlso: Goods and Services Tax
Quick definition
GST stands for Goods and Services Tax. It is a flat tax of ten per cent added to most goods and services sold in Australia. Businesses over the registration turnover threshold must register, collect GST on their sales and pay it to the Australian Taxation Office through their Business Activity Statement.
Add this to the exclusive amount for the GST-inclusive price. To work backwards from a GST-inclusive price, divide it by eleven. Use the exclusive figure in every margin and acquisition calculation.
How it varies across Australia
Most Australian consumer prices are quoted GST-inclusive, so the tax is invisible to the buyer and silently eats into a margin that founders often forget to model. Businesses selling to other registered businesses feel it less because the buyer claims it back.
See how pricing and margin vary across Australian industries →What it actually means
GST is a flat ten per cent tax on most things sold in Australia. The buyer pays it, you collect it, and you hand it to the Australian Taxation Office. You are an unpaid tax collector with paperwork.
The number that trips people up is eleven, not ten. If a price already includes GST, the tax portion is the price divided by eleven, not the price times ten per cent. A product sold for one hundred and ten dollars contains ten dollars of GST, and one hundred dollars is yours.
Once your turnover reaches the registration threshold you must register, add GST to your prices and lodge a Business Activity Statement. You also get to claim back the GST you paid on business purchases, which is the part that makes it bearable.
For marketers the trap is pricing and reporting. Consumer prices must be shown GST-inclusive, so the tax hides inside the sticker price and quietly lowers the margin you actually keep. Run your unit economics on the GST-exclusive figure or every margin, CAC payback and AOV calculation will be off by roughly a tenth.
GST is the silent ten per cent that turns a healthy-looking price into a thinner margin than you planned for.
How to calculate it
GST inside a tax-inclusive price = price ÷ 11. GST added to a tax-exclusive price = price × 0.1
Worked example. You sell a product for one hundred and ten dollars including GST. The GST portion is 110 ÷ 11 = 10 dollars. Your actual revenue is one hundred dollars. If your ad and fulfilment costs are ninety dollars, your real margin is ten dollars, not twenty.
The Australian context
GST is specific to Australia and sits at a flat ten per cent across almost everything, with a short list of exemptions like most basic food, some health and some education. The registration turnover threshold is lower for ride-share and taxi drivers, who must register from the first dollar.
The marketing-relevant rule is price display. Australian Consumer Law requires that a price shown to consumers is the total GST-inclusive price, so you cannot advertise a tax-exclusive figure and add GST at the checkout the way some United States businesses do. Quote the all-in number.
Where people get this wrong
GST (Goods and Services Tax) vs GST-inclusive vs exclusive pricing
| GST (Goods and Services Tax) | GST-inclusive vs exclusive pricing | |
|---|---|---|
| Who sees it | GST is the tax itself | Pricing is how you display that tax |
| The number | Ten per cent of the sale | Inclusive shows the all-in price, exclusive strips it out |
| Used for | Paying the tax office | Quoting consumers vs modelling margin |
Related terms
Common questions
How do I work out the GST in a price?
If the price already includes GST, divide it by eleven. A price of one hundred and ten dollars contains ten dollars of GST. If the price excludes GST, multiply by ten per cent to find the tax to add on top.
When does my business have to register for GST?
When your annual turnover reaches the registration threshold set by the Australian Taxation Office. Ride-share and taxi drivers must register from the first dollar. Below the threshold registration is optional, though some register early to claim GST back on purchases.
Does GST affect my marketing margins?
Yes. Consumer prices are shown GST-inclusive, so a tenth of your headline revenue belongs to the tax office. Run every margin, CAC payback and return-on-ad-spend calculation on the GST-exclusive figure or your numbers will be overstated.
Can I advertise a price and add GST at the checkout?
Not to consumers. Australian Consumer Law requires the total GST-inclusive price to be displayed. Adding GST later is a form of drip pricing and can breach the rules. Business-to-business pricing is more often quoted GST-exclusive.
About New Rebellion
New Rebellion is a marketing intelligence consultancy. We build tools, score Australian businesses on how their marketing actually performs, and publish Debrief every day. This dictionary is part of how we work in the open.
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