GST is a simple formula
You work out GST by comparing the amount you paid on purchases to the amount you collected on sales.
You may need to make adjustments for assets, such as a car or computer, that is shared between your business and family. Visit the ATO page on adjusting GST to find out more.
How to work out GST in four steps
1. Make a note of the GST paid on your business purchases
2. Make a note of the GST collected on sales
3. Add both types of GST
4. Run the GST formula
Avoid nasty surprises with smart bookkeeping
Like any business, you’ll aim to sell more than you buy. If you succeed in doing that, you’ll most likely end up with a GST bill to pay. Run the four-step GST calculation regularly so you can:
- work out how big your GST payment is shaping up to be
- transfer cash to a separate bank account to cover the GST you’ll need to pay
Automate your GST calculations
You can use online accounting software like Xero to stay on top of GST. It automatically records GST collected and paid, and does the maths for you.
The software keeps a running count of your GST situation so you always know where you stand. When your business activity statement (including your GST return) is due, you just connect to the ATO and submit it online. All the information is ready to go.
Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
Guide to GST & BAS
Making a start with GST and BAS? Don’t worry. It’s a little extra admin, but follow our guide to get on top of it.
- What is GST?
You’ve probably heard about GST – it stands for goods and services tax and is added to most prices in Australia.
- Registering for GST
Find out if your business needs to register for GST. If so, learn how to do it and find out what happens next.
- Calculating GST and issuing tax invoices
If you’re a GST-registered business you must add GST to your prices. You also need to issue GST invoices. Find out how.
- Claiming back GST (and input tax credits)
GST-registered businesses can claim back the GST they pay on business expenses. Let’s learn how to claim it.
- Working out your GST refund or payment
Working out GST is simple maths. Keeping track of all your transactions is the tricky part. Let’s learn the process.
- What is BAS and how to lodge it
GST-registered businesses declare how much they’ve collected and paid by completing a business activity statement (BAS).
- Tools and guides for your business
Now you know the ins and outs of GST and BAS, but it can be tough to manage it all. Xero’s got the resources to help.
Download the guide to GST
Get your small business tax sorted. Fill in your details to get our full GST guide as a PDF.