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Chapter 5

Working out your GST refund or payment

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Small business guides > Quick guide to GST and BAS > Working out your GST refund or payment

Working out your GST refund or payment

Working out GST is straightforward maths. Keeping track of all your transactions is the trickiest part. Let’s take a look at the process.

GST is a simple formula

You work out GST by comparing the amount you paid on purchases to the amount you collected on sales.

GST formula

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

How to work out GST you paid

2. Make a note of the GST collected on sales

How to work out GST you collected

3. Add both types of GST

Calculations for filing a GST return

4. Run the GST formula

Calculating GST owed

If it’s a negative number, you’ll get a refund for that amount.

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 GST to pay. Run the four-step GST equation 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.

online accounting software keeping a running account of the GST situation

Chapter 6: BAS: what is it and how to lodge it

There’s no need to feel daunted by business activity statements. We’ll take you through BAS reporting cycles and paying GST.

Read next chapter

This guide is intended as general information only. Always check with a professional for advice.

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